Cathie Wood's Ark Space Exploration ETF Has 'No Reason' To Exist, Says Cramer

CNBC host Jim Cramer has criticized the new space ETF launched by Cathie Wood’s Ark Invest, saying “there aren’t enough genuine space-related stocks to make a decent ETF.”

What Happened: The highly anticipated ARK Space Exploration & Innovation ETF ARKX, which tracks publicly traded companies in the space industry, began trading on Tuesday. The fund declined almost 1% in its first trading session, but also recovered by about 1% in the extended session.

“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, the host of CNBC’s Mad Money, said.

The three highest-weighted holdings in the ETF are Trimble Inc. TRMB, The 3D Printing ETF PRNT and Kratos Defense & Security Solutions Inc. KTOS.

Aerospace and defense firms Boeing Company BA and Thales SA THLLY as well as defense contractors L3Harris Technologies Inc. LHX and Lockheed Martin Corporation LMT have been added to the fund due to their space exposure.

However, the ETF also includes tech companies such as Amazon.com Inc. AMZN, Alphabet Inc. GOOG GOOGL, Netflix Inc. NFLX, tractor manufacturer Deere & Company DE, and Chinese e-commerce giants JD.com Inc. JD, Alibaba Group Holding Ltd. BABA and Tencent Holdings Limited TCEHY.

“Maybe … don’t launch a space ETF if you have to pad it out with Netflix and Deere,” Cramer said.

Why It Matters:  The ARK Space Exploration ETF is Cathie Wood and ARK's first ETF launch in nearly two years. The ETF has said it will invest at least 80% of its assets in domestic and foreign companies that are engaged in the investment theme of space exploration and innovation, as per a regulatory filing.

Ark defines space exploration as “leading, enabling or benefitting from technologically enabled products and/or services that occur beyond the surface of the Earth.”

Cathie Wood and her Ark Investment Management funds are well known for having large weighting in high-conviction stocks like Tesla Inc. TSLA.

Ark's other active ETFs include ARK Fintech Innovation ETF ARKF, ARK Genomic Revolution ETF ARKG, ARK Innovation ETF ARKK, ARK Autonomous Technology & Robotics ETF ARKQ and ARK Next Generation Internet ETF ARKW.

This isn't the first time Wood and Cramer have faced off: