Cathie Wood expands the hot series with the ARK Space Exploration ETF

Such a step would put the fund in a rare company: the fastest ETF to reach $ 1 billion was State StreetS

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fund, which reached the mark in just three days in 2004.

“That’s about the overall strength of ARK right now,” said Nate Geraci, president of the ETF Store, an investment consulting firm. “Right now, investors believe that anything that touches Cathie Wood turns to gold.”

The fund is the first launch of ARK Investment Management LLC in two years and contrasts with the warm receptions received by its previous products. ARK’s flagship innovation fund, started in 2014, took more than 3 and a half years to reach $ 1 billion. Its latest launch, ETF for fintech innovation in 2019, lasted about 21 months.

However, a lot has changed for ARK. Over the course of a year, Ms. Wood’s ARK has transformed from a small primary manager of a handful of ETFs to one of the largest fund managers in the United States. on the back of growing stocks such as Tesla Inc.

and Roku Inc., earning Ms. Wood a cult following of individual investors that hangs on every tweet and video.

But those growth stocks are now the epicenter of a sale that has left ARK’s older funds down at least 14% from their highs earlier this year. Instead of launching another technology-related primary fund, ARK has channeled nearly half of its space ETF to manufacturers, including Lockheed Martin. Body.

, Boeing Co.

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& Co., a stock market sector that has benefited in recent months from rising interest rates and inflation expectations.

The fund is different enough for investors who say they are fans of Mrs Wood, but are also careful to invest more money in a hesitant technology trade.

“Most of Cathie’s ETFs are extremely technological,” said 20-year-old Tré Diemer, a student at William & Mary, who said he bought several thousand dollars of ARKX shares on Monday. “You look at this ETF and you see a lot of names that it wasn’t as involved with.”

He already owns a variety of growing stocks and has looked at Ms. Wood’s other funds as home for some of the money he earns from working as an emergency medical technician and deliveries for DoorDash. Inc.

But Ms. Wood’s technology and other funds seemed overvalued, a point bolstered by the recent losses she said she had suffered.

“You can look at this almost like a reopening ETF,” Mr Diemer said, referring to the underlying stocks ready to benefit the most from a recovering economy.

Not everyone is a fan of background makeup. Some have joined social media, creating memes to mock ARK’s decision to include Deere and other companies that do not appear to have significant links to the fund’s theme of investing in space exploration and innovation. One showed a Deere tractor crossing a landscape on Mars, another on the moon.

Deere, in turn, responded with several memes of his own, including one showing a UFO radiating a tractor. Some analysts have said that the inclusion of Deere is less widespread when they consider that the company produces satellite-guided cars.

Other substantive actions that appear to be inconsistent with its mandate include ARK’s passively managed 3D printing ETF and Netflix shares Inc.

and Amazon.com Inc.

Meanwhile, some of the few stocks of pure space, such as the satellite and imaging company Maxar Technologies Inc.

he didn’t make the cut. Neither Rocket Lab USA Inc. nor does Astra Space Inc., two rocket manufacturers that merge with empty check companies to go public.

Ren Leggi, a client portfolio manager at ARK, acknowledged that the holdings cause some confusion, but said they are all in line with the fund’s mandate. “When we talk about space exploration and innovation, we define it as everything above the ground,” said Mr. Leggi.

The advancement of drone technology plays an important role in why several companies, including Amazon, are basically, Mr. Leggi said. Netflix would benefit from the launch of satellites that allow the further adoption of broadband internet for streaming, and some parts of the missiles are 3D printed, he added. As for the space companies set aside, Mr Leggi said the valuations of some were too rich, especially those involved in special purpose procurement companies, while others did not pass the initial assessment of whether the stock could sustain a rate of annualized return of 15%.

“We continue to pursue many companies if we get a market environment where there is a wider sale and we can enter at an attractive price,” Mr Leggi said.

Some investors remain inconvenient.

“I didn’t like his stakes very much,” said Carter Wang, who is 19 and has about $ 3,000 in four of ARK’s previous funds. He is a fan of Mrs Wood, citing his aggressive calls to Tesla as a key reason behind his decision to invest in more company funds. But Mr. Wang, a business management specialist at the University of California, Santa Cruz, strangely called for the inclusion of ARK’s 3D printing ETF, which prompted him to pass on the fund.

For many ARK investors, Ms. Wood’s past performance is critical. With ARKX trading shares around $ 21, some investors said they see a chance to reach the company’s next success, likening it to the ARK innovation fund, whose stock price is six times higher since its launch. in 2014 and continues to attract the attention of investors. (The ETF recorded record daily inflows in one day last week, raising more than $ 700 million.)

“I don’t really mind,” said James Carter, a 31-year-old technical writer from Washington, DC, who acquired shares on the first day of the space fund’s trading. He said his mind decided to invest in the fund, since he first found out about it earlier this year, just before any of his underlying actions were announced. He maintains that the fund may include shares in Elon Musk’s private rocket company, Space Exploration Technologies Corp.

“I’m a little late” with the other funds, Mr. Carter said of his other ARK investments. “So I set aside money for the new ARK fund just because of my interest in ARK. I wanted to get in early. ”

Write to Michael Wursthorn at [email protected]