Is ARKX a Buy? Billionaires in Space! (and other ARK funds)

$SPCE
  • ARKX is a compelling way to gain exposure to the increasing space economy.
  • ARKX could experience turbulence, but is positioned to prosper over the next 5 years.
  • Explore Ark ETF vehicles for investing and profiting from future technologies (innovation, fintech, genomics, etc.)
  • Overview of 6 ARK invest exchange traded funds
  • Potential 20% annual returns according to Cathie Wood
  • Building a simple portfolio without the need to “pick specific winners”
With Jeff Bezos and Richard Branson recent trips to the outer edges of our atmosphere, there is increasing interest and excitement about space tourism. When I was growing up, space travel was for a select few great astronauts, true American heroes. As an adult, I realized I would probably never be an astronaut. But in the year 2021, there is chance that someday me or my children could go to space.

Just the beginning

The billionaires like Bezos, Branson and Musk are totally fixated on space. Maybe they get bored of all the things they have on Earth, who knows. It is rather exciting and they are pushing the envelope in terms of opportunist and technology. And partly because there is vast amounts of money and value to be made. The good news is that we can be part of the investment opportunity.

once in a lifetime investing opportunity?

Oftentimes we totally take for granted the remarkable age we are all living in. Things are not perfect, but humanity is making major advancements in many areas. This is one reason I highly enjoy investing in ARK funds. Investing is an exercise in creativity and building a strong future. And people can tell that space is a key part of humanities future. I do not want to live out there, but we as humans will continue to push boundaries and invest in life altering technology in space. And remember, Space is not just about landing on Mars. We are talking about satellites, weapons systems, advanced communications, tourism, travel, resources, etc. All the stuff humans do any way, just now in space. In many cases, if one chooses the right investment vehicles and is patient, their hard earned dollars can become many more dollars. This supports expansion of the economy and grows a person’s individual wealth. But which investment vehicle could we add to and let ride for a 5 year investment horizon? How about Ark ETF’s? And specifically, the ARKX Space Exploration fund.

Objective from ARK

The ARK Space Exploration & Innovation ETF’s (“Fund”) investment objective is long-term growth of capital. ARKX is an actively-managed exchange-traded fund (“ETF”) that will invest under normal circumstances primarily (at least 80% of its assets) in domestic and foreign equity securities of companies that are engaged in the Fund’s investment theme of Space Exploration and innovation. The Adviser defines “Space Exploration” as leading, enabling, or benefitting from technologically enabled products and/or services that occur beyond the surface of the Earth.

Invest in the future or the past?

Some investments clearly represent an investment in the past. For example, investing in a big oil company. I am not saying this would be a bad investment, it may very well be a good investment depending on the timing, dividend and value proposition. But regardless, it’s an investment in something that is well known and represents the past. The future will see a reduction in the use of fossil fuels on a large scale.

The future

The future is electric, software, genomics, fintech, etc. We are on the cusp of some absolutely life altering technologies that could unlock massive amounts of value to humanity and shareholder alike. This is one reason we have been Tesla bulls for several years, there is a vision of the future and constant improvements upon technology that solve human problems.

Holdings

Here are some of the top positions in the ARKX ETF.
9.57% TRIMBLE INC TRMB $80.69 721,323 $58,203,552.87
6.56% THE 3D PRINTING ETF PRNT $36.43 1,095,858 $39,922,106.94
6.14% KRATOS DEFENSE & SECURITY KTOS $26.32 1,417,778 $37,315,916.96
6.13% IRIDIUM COMMUNICATIONS INC IRDM $40.95 910,271 $37,275,597.45
5.58% L3HARRIS TECHNOLOGIES INC LHX $225.51 150,416 $33,920,312.16
4.74% JD LOGISTICS INC 2618 $4.71 6,128,208 $28,855,878.19
4.35% LOCKHEED MARTIN CORP LMT $379.98 69,691 $26,481,186.18
4.02% THALES SA HO $101.09 241,827 $24,447,116.36
3.58% KOMATSU LTD 6301 $24.31 895,688 $21,774,441.96
3.05% ALPHABET INC-CL C GOOG
SEE RELATED: Why Tesla is Cool

Stocks vs. ETF’s

Picking individual stocks can be rewarding, but it is also difficult to always pick the winners and best performers within a specific field. For me, choosing exchange traded funds offers the best of both worlds. A person can choose an ETF that is heavily weighted in a stock that you think will do well, with the added benefit of expertise that is combining that asset with others in the same field or theme. In other words, I am shifting the portfolio away from individual stocks and find high quality exchange traded funds as preferred investment vehicle or “longboat”.

Hard to Pick Winners

For me, it seems hard to pick winners in this space (pun intended). Therefore for the average investor like me, it makes sense to invest in an all encompassing fund that actively manages trades and does research into the next big companies in space.

Other ARK Funds

ARK Funds are geared to capturing the value of future technology and platforms that are changing the world in great ways. When companies solve human problems and monetize that change, they add tremendous value to the world and their shareholders. ARK Funds primarily focus on 5 specific areas of future technology and growth. And not only are these companies changing the world, they will make tons of money doing so. Here are the main focus areas of ARK ETF’s
  • ARK Innovation ETF
  • ARKQ, Autonomous Tech & Robotics ETF
  • ARKW, Next Generation Internet ETF
  • ARKG, Genomic Revolution ETF
  • ARKF, Fintech Innovation ETF

Ark Inovation ETF’s (ARKK)

PERFORMANCE: 5 year – 83% If you read our blog or listen to The Money Vikings Podcast we are regularly analyzing Ark investing. I really enjoy listening to Cathie Wood and her approach to investing. She and her team are looking out to the future and investing in innovative spaces in many industries. There are several Ark ETF’s, each with a particular focal area. Here is a description of one of our favorites, Ark Innovation
ARK defines ‘‘disruptive innovation’’ as the introduction of a technologically enabled new product or service that potentially changes the way the world works. Companies within ARKK include those that rely on or benefit from the development of new products or services, technological improvements and advancements in scientific research relating to the areas of DNA technologies (‘‘Genomic Revolution”), industrial innovation in energy, automation and manufacturing (‘‘Industrial Innovation’’), the increased use of shared technology, infrastructure and services (‘‘Next Generation Internet’), and technologies that make financial services more efficient (‘‘Fintech Innovation’’). ARKK is an actively managed ETF that seeks long-term growth of capital by investing under normal circumstances primarily (at least 65% of its assets) in domestic and foreign equity securities of companies that are relevant to the Fund’s investment theme of disruptive innovation

ARK Genomics ETF

PERFORMANCE: 5 year – 33% The ARK Genomic Revolution ETF is one of the ARK funds among this year’s best ETFs and it is, quite simply, a stellar performer among health care funds. A 2020 gain of almost 130% confirms! Over the past three years, the actively managed ARKG is higher by 226.7% while the S&P 500 Health Care Index and the Nasdaq Biotechnology Index are up 40.6% and 35.2%, respectively. ARKG is comprised of companies engaged in bioinfomatics, CRISPR, stem cell research and targeted therapeutics, among other growthier corners of the healthcare universe. Only time will tell if ARKG’s recent success will be replicated like DNA sequences, but what isn’t up for debate are sound fundamentals. For example, genomics costs are declining, making the treatments and therapies available in this space more accessible to a broader range of patients. Second, genomics companies are at the epicenters of some compelling advancements, including dark read DNA sequencing and precision medicine. Some forecasts call for the genomics segment to deliver a compound annual growth rate (CAGR) of 9.3% through 2025. If that estimate is accurate, ARKG should soar.

ARKQ (Autonomous Tech & Robotics)

We all know from Sci Fi movies that the future will include evil robots that take over the world. Just kidding, maybe they will not be evil robots, perhaps they will be robots that do millions of jobs that humans currently do. The fund provides exposure to autonomous vehicles, energy storage, robotics and automation, 3D printing, and space exploration.

Actively managed, higher fees

Ark funds do have higher expense ratios compared to say a Vanguard ETF. But it should be worth the extra cost if able to generate 10-20% returns consistently. Ark has a 5 year investing time horizon. For me personally they will make up a good portion of my portfolio geared towards capitalizing on explosive technological growth and disruption.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: