Cathie Wood's Ark Venture Fund Is Sitting on SpaceX, OpenAI, and Anthropic All at Once. Here's What Investors Need to Know.

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.

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.

Image source: Getty Images.

The Ark Venture Fund is a bit different

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:

Source: Ark Invest. Data as of May 31.

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.

The fund doesn't come cheap

This is an actively managed fund, and like most, it has steep fees:

• Management fee: 2.75%
• Service fee: 0.15%
• Interest payments and other expenses: 0.59%

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.

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.