Editor’s note: This article was updated on March 30 to correct the number of holdings in the ARKX ETF.
Buckle your seatbelts and get ready for blast off, because the Ark Space Exploration ETF (BATS:ARKX) from Ark Invest starts trading today. With investors ready to play astronaut to take the fund and its holdings sky high, what should you know about the ARKX ETF now?
All you really need to know is that Cathie Wood is involved. The iconic, innovation-focused fund manager has gained quite a favorable reputation with retail investors. That is because her big bets on companies like Tesla (NASDAQ:TSLA) and Teladoc (NYSE:TDOC) have paid off. Now, the hope is that her bet on space exploration will do the same.
With that in mind, here is what you need to know about the ARKX ETF as it starts trading:
- The ARKX ETF will primarily trade on the Cboe BZX Exchange.
- Its expense ratio comes in at 0.75%, or $75 on an initial $10,000 investment.
- Ark Invest says the fund will typically have 40-55 holdings.
- Right now, the Space Exploration ETF holdings include 38 companies.
- These companies have a median market capitalization of $30 billion.
- Cathie Wood is at the helm of the actively managed ETF. This makes the ARKX ETF her eighth fund, and her first new fund in two years.
- Importantly, it seems investors like the philosophy of the new fund.
- Investors should note that the ARKX ETF plans to focus on four groupings of companies. These are orbital aerospace, suborbital aerospace, enabling technology and aerospace beneficiary companies.
- For example, aerospace beneficiary companies include agriculture, internet access and GPS firms.
- Investors should note that the top fund holding is currently Trimble (NASDAQ:TRMB), which has an 8.6% weight.
- The other top 10 holdings include Kratos Defense (NASDAQ:KTOS) and L3Harris (NYSE:LHX). You can read the full list here.
What to Know About the ARKX ETF Now
There is no denying that investors are excited about the ARKX ETF. The fund has been generating excitement ever since Ark Invest first announced its launch. This is largely because investors are bullish on the ripple effects. Wood is largely followed as an influencer, and her Ark Innovation ETF (NYSEARCA:ARKK) has seen $16 billion in inflows just in 2021. With her endorsement of space companies, investors are betting the fund holdings get a boost. From there, other space stocks could rally, all in hopes of future inclusion and the strength of the emerging trend.
However, there are two things to watch. The first is that many emerging space companies got passed over in ARKX. The second is that Wood and ARKK have struggled this year despite their popularity. ARKK is in the red year to date, particularly as top holdings like Tesla stumble. Could this recent performance serve as a headwind for the new space fund?
It seems investors will have to wait and see. Get ready for the ARKX ETF launch, and make sure your portfolio is fueled up.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.
