CNBC’s Jim Cramer said Tuesday he was skeptical of the latest exchange-traded fund launched by Cathie Woods Ark Invest.
“One look at the relaunched ARK Space Exploration ETF will tell you everything you need to know about how managers can’t resist creating new funds when there’s no reason to exist,” added Cramer.Bad money. “
Trimble, The 3D printing ETF and unmanned system provider Kratos defense and security solutions are the three most heavily weighted positions in the fund. Defense company L3Harris and Lockheed Martinand the aircraft manufacturer Boeing are also part of the fund due to their space requirements.
While ARKX includes some space-only games, Cramer was at a loss as to why names like it Amazon, alphabet and Netflix were included in the fund together. Chinese e-commerce is playing JD.com, Alibaba and Tencent – as well as the tractor manufacturer Deere – are also part of the ETF holdings.
“It’s ridiculous, but there aren’t enough real space-related stocks to make a decent ETF, and the manager wants that 0.75% expense ratio,” Cramer said. “Maybe … don’t start a space ETF if you have to equip it with Netflix and Deere.”
Ark Invest did not immediately respond to CNBC’s request for comment.
Targeting disruptive businesses, especially those in the tech space, Ark Invest drew a lot of attention to the other strong funds during the Covid-19 pandemic. That momentum has slowed this year, however, as many investors sold high-growth stocks over the past year in favor of companies whose business is expected to boom during an economic recovery.
In its ARKX prospectus, the company said it plans to invest at least 80% of its assets in domestic and foreign companies that are related or will benefit from space or off-surface services.
Disclosure: Cramer’s charitable foundation owns shares in Alphabet, Amazon, and Boeing.