As winter sets in for Ukraine, ARKX is ready for drone orders

No other event impacted the markets this year like the Russian invasion of Ukraine. The Russian military launched a new offensive this week ahead of Ukraine’s liberation of previously occupied Kherson. As winter looks set to harden the battle lines, investors looking for a drone ETF should take a close look at the ARK Space Exploration and Innovation ETF (ARKX) and its third holding AeroVironment (AVAV).

AVAV received an analyst upgrade from Raymond James late last week due to a ramp-up in orders over the past few months, highlighted by news on Thursday that the U.S. military awarded a $86 million contract to the company.

AVAV’s unmanned aerial vehicles have played a notable role in US efforts to support Ukraine against Russia, increasing demand for their reconnaissance and surveillance capabilities. This surge in demand has manifested itself in its share price, which has risen 6.6% in the past five days and 20.2% in the past month, compared to just 15.6% in the past. of the last six months.

ARKX, which owns AVAV at 7.3% behind autonomous agricultural vehicle company Trimble Inc., (TRMB) and Iridium Communications Inc. (IRDM) at 10.3% and 7.7% respectively, invests in global companies working in orbital and suborbital aerospace.

Due to its narrow technology focus on companies working in spaces that can support space exploration like robotics, materials, and 3D printing, it can augment rather than replace a core technology portfolio. Add to that its recent uptick in performance, with a one-month return of 10.3% versus -13.3% over the past three months, and it can be a handy addition to a bullish investor’s portfolio.

For just over a year, after launching in March last year, ARKX has been charging a 75 basis point fee for exposure to its holdings and strategy. As investors reinvest in the sequel to ARK Invest through other strategies like the flagship ARK Innovation ETF (ARKK)investors may want to follow ARKX and its growth potential as demand for drones increases for Ukraine and its allies.

For more news, insights and strategy visit the Disruptive technology chain.

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