Star fund manager Cathie Wood is setting her eyes on yet another booming industry, and it’s setting the stocks on fire.
ARK Investment Management, an asset-management firm led by Wood, filed late Wednesday to launch the ARK Space Exploration exchange-traded fund under the ticker ARKX.
Although the fund isn’t on the market yet and its exact holdings are unknown, the news itself was bullish enough to spark a rally in many companies related to the space business.
ARK declined to comment on the filing.
This is the latest demonstration of how popular and influential ARK Investment and its founder Wood has become in the past year.
ARK’s actively managed ETFs were some of the best performers in 2020 thanks to their bets on highflying stocks like electric-car maker
(TSLA). Wood is a fervent believer in disruptive innovation and the huge growth potential of the market leading companies.
The strong performance has been attracting billions of dollars in new cash to ARK’s funds. The firm’s flagship
ETF (ARKK) has returned more than 170% over the past 12 months and grew its assets under management by more than tenfold, to $22 billion. It is now the largest active ETF in the world, and ARK itself one of the top 10 issuers—only six years after it was founded.
According to the filing, ARK’s new fund will primarily track companies engaged in space exploration and innovation, defined as “leading, enabling, or benefiting from technologically enabled products and/or services that occur beyond the surface of the Earth.” That includes companies in four categories, according to ARK: orbital aerospace, suborbital aerospace, enabling technologies, and aerospace beneficiary.
Elon Musk’s SpaceX made history last year when it became the first private company to launch Americans into orbit, and investors’ interest in space companies has been picking up.
Still, despite its gigantic growth potential, space exploration is far from generating any meaningful revenue, not to mention being profitable. “There is no assurance that such company will derive any revenue from innovative technologies in the future,” ARK’s filing said.
Virgin Galactic Holdings
(ticker: SPCE), a commercial spacecraft company, are surging more than 14% in recent trading in expectations that the stock would be one of the ARK Space fund’s holdings.
(MAXR), a space communications company, is soaring 26.7%.
Other companies focused on beyond-earth endeavors—including a few special purpose acquisition firms, or SPACs—also were gaining on Thursday following the news.
New Providence Acquisition
(NPA) is up by 8.1%, and
Stable Road Acquisition
(SRAC) by 21.3%.
More space companies are expected to enter the public markets in 2021, via both traditional IPOs and with SPACs.
The rally has lifted the existing funds investing in space exploration. The $44 million
ETF (UFO) jumped 5.9% in recent trading, while the $13 million
SPDR S&P Kensho Final Frontiers
ETF (ROKT) gained 3.1%.
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