CNBC host Jim Cramer has criticized the new space ETF launched by Cathie Wood’s Ark Invest, saying “there aren’t enough genuine space-related stocks to make a decent ETF.”
What Happened: The highly anticipatedARK Space Exploration & Innovation ETF(BATS:ARKX), which tracks publicly traded companies in the space industry, began trading on Tuesday. The fund declined almost 1% in its first trading session, but also recovered by about 1% in the extended session.
“One look at the newly launched ARK Space Exploration ETF tells you everything you need to know about how managers can’t resist creating new funds, even if there’s no reason for them to exist,” Cramer, the host of CNBC’s Mad Money,said.
The three highest-weightedholdingsin the ETF areTrimble Inc.TRMB 1.01%,The 3D Printing ETF(BATS:PRNT) andKratos Defense & Security Solutions Inc.KTOS 1.79%.
Aerospace and defense firmsBoeing CompanyBA 0.66%andThales SATHLLY 1.47%as well as defense contractorsL3Harris Technologies Inc.LHX 0.01%andLockheed Martin CorporationLMT 0.53%have been added to the fund due to their space exposure.
However, the ETF also includes tech companies such asAmazon.com Inc.AMZN 0.66%,Alphabet Inc.GOOG 0.02%GOOGL 0.03%,Netflix Inc.NFLX 0.11%, tractor manufacturerDeere & CompanyDE 1.51%, and Chinese e-commerce giantsJD.com Inc.JD 1.52%,Alibaba Group Holding Ltd.BABA 1.13%andTencent Holdings LimitedTCEHY 0.18%.
“Maybe … don’t launch a space ETF if you have to pad it out with Netflix and Deere,” Cramer said.
Why It Matters: The ARK Space Exploration ETF is Cathie Wood and ARK's first ETF launch in nearly two years. The ETF has said it will invest at least 80% of its assets in domestic and foreign companies that are engaged in the investment theme of space exploration and innovation, as per aregulatory filing.
Ark defines space exploration as “leading, enabling or benefitting from technologically enabled products and/or services that occur beyond the surface of the Earth.”
Cathie Wood and her Ark Investment Management funds are well known for having large weighting in high-conviction stocks likeTesla Inc.TSLA 3.98%.
Ark's other active ETFs include ARK Fintech Innovation ETFARKF 1.95%,ARK Genomic Revolution ETFARKG 1.53%,ARK Innovation ETFARKK 2.89%,ARK Autonomous Technology & Robotics ETFARKQ 2.14%andARK Next Generation Internet ETFARKW 2.25%.
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