(Bloomberg) — Cathie Wood’s Ark Investment Management launched its first new exchange-traded fund in two years on Tuesday, a key test of the money manager’s appeal after a choppy few months of both flows and performance.
The actively managed ARK Space Exploration ETF (ticker ARKX), which tracks U.S. and global companies engaged in space exploration and innovation, saw more than $294 million worth of shares change hands in Tuesday trading, the eighth-best debut in ETF history.
When Ark filed for the fund in January it triggered an industry-wide rally — such was the hype surrounding Wood, whose ETFs were among the best-performing of 2020. Since then Ark’s bets have been rattled amid a broader tech selloff. The flagship Ark Innovation ETF (ARKK) has posted investor exits for five days running, according to the latest data, the longest stretch of consecutive outflows since the fund started in 2014.
Nevertheless, Ark ETFs overall have attracted almost $16 billion of new cash this year, signaling demand for a new offering could be robust. Despite recent turbulence, all five of Wood’s existing actively-managed products are up more than 130% in the past 12 months.
“That performance naturally attracts more investments, especially on the part of retail traders,” said Matthew Weller, global head of market research at Forex.com. “The optimism evoked by Cathie Wood and her team is almost infectious — that’s something that has legs.”
The initial spike of trading in ARKX drew comparisons to the launch of the VanEck Vectors Social Sentiment ETF (BUZZ) earlier this month. That fund saw about $260 million worth of shares change hands in the first hour of trading, compared with $114 million for ARKX, according to Eric Balchunas, ETF analyst for Bloomberg Intelligence. In total, BUZZ traded about $440 million worth of shares in its first day.
But the space fund far surpassed the first-day action in Wood’s last fund launch in 2019, when the ARK Fintech Innovation ETF (ARKF) saw $1.2 million worth of shares traded.
At the outset, the space fund’s top two holdings are Trimble Inc. and another Ark fund called the 3D Printing ETF (PRNT) with weights of 8.6% and 6%, respectively. Other large stakes include Kratos Defense & Security Solutions Inc., L3Harris Technologies Inc. and JD.com Inc., an online retailer in China. The fund aims to invest at least 80% of its assets in the space industry.
Possible competitors include the Procure Space ETF (UFO), which was among those that rallied when Ark filed for the new fund. Assets in UFO have roughly tripled since then to $129 million.
(Updates with day’s trading in second paragraph, leaderboard table)
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