CNBC’s Jim Cramer mentioned Tuesday he was skeptical concerning the newest exchange-traded fund launched by Cathie Wood’s Ark Invest.
“One look at the newly launched ARK Space Exploration ETF tells you everything you need to know about how managers can’t resist creating new funds, even if there’s no reason for them to exist,” Cramer mentioned on “Mad Money.”
Trimble, The 3D Printing ETF and unmanned methods supplier Kratos Defense and Security Solutions are the fund’s three highest-weighted holdings. Defense contractors L3Harris and Lockheed Martin, in addition to airplane producer Boeing, are additionally a part of the fund due to their space publicity.
While ARKX consists of some pure space performs, Cramer was perplexed as to why names like Amazon, Alphabet and Netflix have been included within the fund alongside. Chinese e-commerce performs JD.com, Alibaba and Tencent — in addition to tractor producer Deere — are additionally a part of the ETFs holdings.
“It’s ridiculous, but there aren’t enough genuine space-related stocks to make a decent ETF and the manager wants to collect that 0.75% expense ratio,” Cramer mentioned. “Maybe … don’t launch a space ETF if you have to pad it out with Netflix and Deere.”
Ark Invest didn’t instantly reply to CNBC’s request for remark.
Ark Invest, which targets disruptive corporations significantly ones in know-how, has picked up a number of consideration for its different funds’ sturdy in the course of the Covid-19 pandemic. However, that momentum has eased this yr in as many buyers have bought high-growth shares from the previous yr in favor of corporations whose companies are anticipated to increase throughout an financial restoration.
In its ARKX prospectus, the corporate mentioned it plans to make investments at the least 80% of its belongings in home and international corporations which can be related or will profit from space journey or providers past the earth’s floor.
Disclosure: Cramer’s charitable belief owns shares of Alphabet, Amazon and Boeing.