Ark Invest ARKX space exploration ETF begins

Trading in Ark Invest’s new space exploration ETF began on Tuesday, as Cathie Wood’s company looks to tap into the growing space industry.

“Space is already an invisible backbone of our economy and we believe it will only become more and more so. [satellite] launch of the constellations, ”Sam Korus, analyst at Ark Invest, told CNBC’s Morgan Brennan on“ Power Lunch ”.

ARKX shares slipped just over 1% on its first day of trading, opening the stock at $ 20.50 per share.

ARKX’s 39 stocks include pure space companies like Iridium and Virgin Galactic, as well as defense and aerospace giants like Kratos, L3Harris, Lockheed Martin and Boeing.

But the ETF also includes names that aren’t traditionally tied to the space industry, like Chinese e-commerce companies JD.com and Alibaba, or agricultural companies like Trimble and Deere.

“We’ve all seen the memes circulating on Twitter,” Korus said, acknowledging public skepticism about ARKX’s holdings.

“The fact that people reject this out of hand is very reassuring for us and somehow demonstrates the kind of research we do and how unique we can be,” he added.

Korus gave the example of Netflix, which has a 1.25% weighting in ARKX.

“Netflix … has 200 million paying subscribers. In the United States alone, there are more than 40 million people who do not have access to broadband and therefore, if a satellite solution can provide the “Accessing those customers and expanding the addressable and top market for Netflix is ​​something very important,” Korus said.

While none of the seven PSPCs that recently announced mergers with space companies are in ARKX, Korus noted that Ark “is constantly evaluating these companies.”

“I think with PSPCs it’s important to remember that a lot of them are almost in the pre-IPO stage,” Korus said. “We really want to make sure we pick the long term winners, especially in aerospace – where a lot of companies go bankrupt and things are delayed.”