The ARKX ETF fund has notably invested in companies with a market capitalization of an average of $30 billion. 

Ark Space Exploration & Innovation ETF (Cboe BZX: ARKX) began trading on Tuesday with huge expectations from investors. Cathie Wood is on the top of the fund management, whereby it is expected to hold 40-45 holdings. However, the fund currently has 38 median capped companies including space exploration startups and their beneficiaries.

The fund is betting big on the space exploration industry and the impact on the global economy. Speaking to CNBC’s Morgan Brennan on “Power Lunch”, Ark Invest analyst Sam Korus noted that the firm conducted thorough research on the space industry and the potential to disrupt the global market in the near future.

“Space is already an invisible backbone to our economy and we think that’s only going to become more so as [satellite] constellations launch,” he said.

Notably, ARKX shares dropped approximately 1% during the first day to close the day trading at $20.30. Meanwhile, they had jumped approximately 1.08% during the after-hours trading session to trade around $20.52.

Bigger Picture on ARKX ETF Fund

The ARKX ETF fund has notably invested in companies with a market capitalization of an average of $30 billion. Trimble Inc (NASDAQ: TRMB) is among the top holdings of the ETF fund. As a result, TRMB stocks jumped approximately 1% yesterday to close the day trading at $76.85. Notably, Trimble stocks significantly benefited from the pandemic as they jumped approximately 138% last year according to market data provided by MarketWatch.

Other notable companies included in the ETF fund include Kratos Defense & Security (NASDAQ: KTOS), (NASDAQ: JD), Boeing Co (NYSE: BA), Iridium Communications (NASDAQ: IRDM), Netflix Inc (NASDAQ: NFLX), and Thales (OTCMKTS: THLLY).

The firm not only invested in the space exploration industry but also companies that are set to benefit from the space exploration industry including the agricultural sector, entertainment industry among others.

According to Korus, a company like Netflix is expected to see a spike in users once more people are connected to the internet with the help from its sponsored space programs. “Netflix … has 200 million paying subscribers. In the US alone, there’s over 40 million people who don’t have access to broadband and so, if a satellite solution can bring access to those customers and expand the addressable market and the topline for Netflix, then this is something that is very important,” Korus said.

Further, Korus noted that Ark Invest is constantly researching on the SPAC companies that have merged with the space exploration companies. “I think with SPACs it’s important to remember that a lot of these are almost at the pre-IPO stage,” Korus said. “We really want to be sure that we’re picking the winners long term, particularly in aerospace – where many companies do go bust and things get delayed.”

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Steve Muchoki

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