Space exploration is new territory for innovation and investment and it takes an ample amount of courage; much like Neil Armstrong's small step for menkind kind of courage.
ARK investments launched their new ETF today, with the ticker symbol ARKX and a theme of Space Exploration. They couldn't have chosen a more worst day than today when SpaceX's SN11 explodes during a test flight at about 5 minutes into the flight.
ARK investment is famous for their performance last year with over 160% gains across all their ETFs (ARKK, ARKG, etc.) and they are believed to be unorthodox in their choice of portfolio which mainly consists of Innovation, Technology, and Futuristic stocks that may or may not perform but are provided enough confidence and funding to continue their research and contribute to the science and technology of future. Like all other ARK ETFs, ARKX is also actively managed and most probably will have similar buying and selling activity every day.
- Orbital Aerospace Companies, that launch, make, service, or operate platforms in the orbital space, including satellites and launch vehicles.
- Suborbital Aerospace Companies that launch, make, service, or operate platforms in the suborbital space, but do not reach a velocity needed to remain in orbit around a planet.
- Enabling Technologies Companies that develop technologies used by Space Exploration. i.e. Artificial Intelligence, Robotics, 3D Printing, Materials, and Energy/Data Storage.
- Aerospace Beneficiary Companies whose operations stand to benefit from aerospace activities, including Agriculture, Internet, GPS, Construction, Imaging, Drones, Air Taxis, and Electric Aviation Vehicles.
ARKX portfolio has a major holding of 8.61% in Trimble Inc which makes GPS, Global Navigation Satellite System, laser, and optical technologies and software that help guide and track machines, equipment, parts, and people. Another major positioning is in 3D printing space with 6.03%. Some other choices like Amazon, Netflix, etc are beyond my understanding because the only relation they have with innovation is Technology. Netflix pioneers in Microservices and Cloud Computing and changed the way we perceived Services Oriented Architecture and how we managed our data online. Amazon pioneers in AWS and cloud computing as well and was here before Netflix and introduced cloud computing before Netflix could jump the bandwagon and innovate. Their capability to innovate and contribute to Software and Technology may be the reason, apart from that, I do not see why these two would make up 3.04% and 1.27% of this portfolio.
ARKX opened at 20.50 today on the first day of the launch and saw a decline of 1% before the market closed. After-hours trading brought it back close to its open price and tomorrow is another day with the news of SPACX's explosion and current market pressure on innovation and growth stocks.
I think ARKX very well could see a $15 value before it can really mark its first flight but the sky is the limit for this ETF.
If you are a long-term trader, you should not be worried about's current value of its next month's value really, but if you are a day trader or a swing trader who wants to capitalize on the market mood, I would suggest you wait and let it mark its territory and pick up a direction.
P.S. I am not a financial advisor, and certainly not your financial advisor. Please use this article for your information purposes only and make your own trading decisions. I am in no way promoting or suggesting you buy anything. Please Do Your Own Research before investing in anything. Invest only what you can afford to lose.
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