ARKX: The Space ETF That Could Be Your Portfolio's Golden Dome

Michael Del Monte
4.93K Followers
(8min)

Summary

  • ARK Space Exploration & Innovation ETF offers thematic exposure to space and defense innovation but has high concentration risk, with the top 10 holdings making up over 64% of the portfolio.
  • The ETF benefits from rising global defense spending and government contracts, particularly in hypersonic and satellite technologies, supporting its growth outlook.
  • ARKX has outperformed the S&P 500 year-to-date but underperformed since inception, and carries higher volatility and downside risk due to its high beta.
  • Despite risks and a higher expense ratio, I recommend ARKX as a buy, driven by strong industry tailwinds and momentum in the defense and space sectors.
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The ARK Space Exploration & Innovation ETF (BATS:ARKX) is an actively managed, thematic investment strategy that was designed to invest in space and related stocks.

In general, the ETF invests in space-related stocks, many of which contract for the DoD, opening the door

This article was written by

4.93K Followers
Michael Del Monte is a buy-side equity analyst with over 5 years of industry experience. Prior to working in the investment management industry, Michael spent over a decade in professional services working across industries that include O&G, OFS, Midstream, Industrials, Information Technology, EPC Services, and consumer discretionary.Investment recommendations are built upon the entirety of the investment ecosystem rather than considering a company independently.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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