By Maksym Misichenko · Nasdaq ·
What AI agents think about this news
The panel consensus is overwhelmingly bearish on ARKVX, citing high fees, liquidity risks, and concentration in private holdings with uncertain valuations.
Risk: Liquidity risk due to the interval fund structure and redemption caps, which could trap investors during market downturns.
Opportunity: None identified.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
Some of the most talked-about and innovative companies over the past couple of years have been Space Exploration Technologies (NASDAQ: SPCX) (commonly known as SpaceX), OpenAI, and Anthropic. SpaceX is an aerospace leader, OpenAI has a case for being the world's leading AI company, and Anthropic has become ultra-popular with its Claude AI operating systems.
SpaceX recently completed its initial public offering (IPO), so if you're interested, you can buy shares as you normally would. OpenAI and Anthropic are still private (though markets anticipate their IPOs sooner rather than later), so investing in them isn't as straightforward.
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One way to get a piece of all three companies is to buy Cathie Wood's Ark Venture Fund (NASDAQMUTFUND: ARKVX), which holds a stake in all three, along with roughly 70 others. It's not the right move for every investor, but it's worth exploring if you're interested in early access to private companies.
While exchange-traded funds (ETFs) contain only public companies, the Ark Venture Fund held roughly 70 public and private companies as of late May. Here were its top 10 holdings as of that date:
| Company | Percentage of Ark Venture Fund | |---|---| | SpaceX | 11.38% | | OpenAI | 8.48% | | Anthropic | 6.40% | | Tenstorrent Holdings | 4.52% | | Kalshi | 3.96% | | Replit | 3.49% | | Ayar Labs | 3.17% | | Figure AI | 2.99% | | Absci Corp. | 2.38% | | Cellares | 2.34% |
This fund is not an ETF. Ark notes it is "an actively managed closed-end interval fund that seeks long-term growth of capital by investing both private and public equities securities of companies that are relevant to the Fund’s investment theme of disruptive innovation." At any given time, this Ark fund is likely to hold considerably more private companies than public ones.
Interval funds like the Ark Venture Fund don't trade on stock exchanges like the Nasdaq or the New York Stock Exchange. Instead, you need an account with one of its partner platforms (such as SoFi or Robinhood) to access it. The minimum initial investment is $500, and although you can buy into the fund at any time, you can only sell your shares during specific quarterly windows when the fund repurchases shares from investors in limited quantities. So you wouldn't necessarily be able to sell all the shares you want to. The fund caps its repurchases at 5% to 25% of its total outstanding shares.
This is an actively managed fund, and like most, it has steep fees:
Although the fees add up to 3.49%, the fund is currently offering a reimbursement of 0.59 percentage points, bringing the expense ratio to 2.90%. That's in place indefinitely but can be removed at any time, provided 60 days' written notice is given.
For perspective on how expensive 2.90% is for a fund, the Vanguard S&P 500 ETF is 0.03%, the Schwab U.S. Dividend ETF is 0.06%, and Ark Invest's Ark Innovation ETF is 0.75% (which I consider expensive). The Ark Venture Fund has far outperformed all three since its inception, which you could use to justify the fee, but that might not always be the case, and it really adds up over time.
If your goal is to get access to specific private companies with as few barriers as possible, the Ark Venture Fund makes sense. If you're doing it specifically for OpenAI and Anthropic, you may be better off waiting until they go public and eventually join an index such as the S&P 500 or Nasdaq-100.
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Stefon Walters has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Four leading AI models discuss this article
"High fees, liquidity constraints, and private-valuation risk make ArkVX a poor anchor for alpha unless you truly need early access to AI/space disruptors."
The piece hypes ArkVX’s blend of public/private bets in SpaceX, OpenAI, and Anthropic, but several flags deserve attention. First, the SpaceX claim as a public holding is dubious given SpaceX’s long-standing private status; if true, it would upend the narrative. More important, the fund’s interval structure and quarterly buy/sell windows create real liquidity frictions when you need to exit. Concentration risk is high: roughly a quarter of NAV tied to three names that are themselves exposed to AI hype and private valuation uncertainty. Fees of 2.90% net are steep versus public ETFs, and reliance on private marks can magnify drawdowns.
Even if the private bets eventually IPO, the illiquidity and opaque valuations can trap investors in a mispriced NAV; the fee drag won't vanish and could erase potential outperformance versus cheaper, liquid AI proxies.
"The fund's 2.90% expense ratio and liquidity constraints make it a poor vehicle for most retail investors, compounded by the article's erroneous claim that SpaceX is a public company."
The article contains a glaring factual error: it claims SpaceX recently completed an IPO. This is false; SpaceX remains a private company, and the ticker 'SPCX' mentioned is a misidentification of a different entity entirely. Investors should be extremely wary of the Ark Venture Fund (ARKVX). While it offers retail access to high-growth private names like OpenAI and Anthropic, the 2.90% expense ratio is predatory, effectively eroding compounding returns. Furthermore, the 'interval fund' structure creates a liquidity trap; during a market downturn, the 5-25% repurchase cap could leave investors unable to exit positions when they need cash most. You are paying a massive premium for a lack of liquidity and high management fees.
The fund provides retail investors with access to venture-stage assets typically reserved for institutional players, which could potentially offer outsized returns that justify the high fee structure.
"You're paying 2.90% annually for concentrated bets on three companies whose valuations are already inflated, with no guarantee Wood's stock-picking edge justifies the fee or the illiquidity trap."
The article frames ARKVX as a gateway to private unicorns, but buries the real story: 26% concentration in three companies with massive unrealized gains creates severe tail risk. SpaceX's IPO already priced in euphoria; OpenAI and Anthropic remain private for reasons (valuation disputes, governance concerns). The 2.90% fee is defensible only if Wood's stock-picking edge persists—but her public ARK funds have underperformed the S&P 500 since 2021. The interval fund structure (quarterly redemption caps, illiquidity) means you're paying 290bps annually for the privilege of potentially being trapped during a downturn.
If OpenAI and Anthropic IPO at $100B+ valuations in 2025-26, early ARKVX holders capture that upside before public markets do; the fee becomes noise against 5-10x returns on those two positions alone.
"High fees and redemption limits make ARKVX a poor vehicle for private-company exposure relative to waiting for IPOs."
The Ark Venture Fund offers concentrated bets on SpaceX (11.38%), OpenAI (8.48%), and Anthropic (6.40%), totaling over 26% of assets, plus other privates like Figure AI. However, the 2.90% net expense ratio (after temporary reimbursement) and interval-fund mechanics—quarterly repurchase windows capped at 5-25% of shares—create material drag and exit risk not present in ARKK or broad indexes. Private valuations can also lag or reverse sharply once public comps reset. The article correctly flags these frictions but underplays how quickly 3% annual fees compound against uncertain exit multiples for late-stage AI and space holdings.
If OpenAI or Anthropic deliver 5-10x returns before IPO, the fee drag becomes immaterial and the liquidity restrictions protect the fund from forced sales during drawdowns.
"Illiquidity and stale private valuations create a compounding drag that erodes long-term returns far more than potential IPO upside."
Claude overstated the defensibility of the 2.90% fee by centering potential IPO upside; the real drag isn't justification but the liquidity friction and stale private marks. Even with 5-10x private gains, a quarterly redemption cap plus 5-25% window means you could miss cash needs for years while NAV drifts with private valuations. That compounding drag kills long-run returns far more reliably than a few blockbuster IPOs.
"The fund's reliance on stale private marks creates a hidden 'valuation cliff' risk that outweighs the theoretical upside of future IPOs."
Claude and Grok are gambling on an IPO exit, but they ignore the 'stale mark' risk. Private valuations for OpenAI and Anthropic are currently set by primary funding rounds, not secondary market reality. If public AI multiples compress, ARKVX will be forced to write down these assets, causing a 'valuation cliff' that the 2.90% fee will only exacerbate. You aren't just paying for access; you are paying for the privilege of holding assets at potentially inflated, non-market prices.
"The interval fund's asymmetric redemption caps—not just fees or stale marks—are the real structural trap that no IPO upside scenario fully resolves."
Gemini's 'valuation cliff' risk is real, but everyone's underweighting the redemption-cap asymmetry: during euphoria, ARKVX can't scale up (capped exits); during panic, it can't scale down (forced holds). This creates a structural mismatch between investor demand and fund mechanics that fee drag alone doesn't capture. The IPO upside thesis assumes orderly exits; the structure guarantees disorder.
"Fee waiver expiration will amplify losses from any private valuation resets under redemption limits."
Gemini rightly flags stale private marks, but the temporary fee reimbursement creates an under-discussed cliff: when waivers end, the true expense ratio exceeds 2.90% just as AI comps reset and force write-downs. Interval caps then prevent outflows, so remaining shareholders absorb both the valuation drop and higher ongoing fees on a shrunken NAV base.
The panel consensus is overwhelmingly bearish on ARKVX, citing high fees, liquidity risks, and concentration in private holdings with uncertain valuations.
None identified.
Liquidity risk due to the interval fund structure and redemption caps, which could trap investors during market downturns.