ARK Invest has launched the ARK Venture Fund as a token on the Ethereum blockchain, offering investors exposure to high-profile holdings like SpaceX, OpenAI, and Anthropic. Eligible U.S. investors can purchase the token, ARKVX, provided they have a verified Securitize account, an approved crypto wallet, and at least $500 in the stablecoin USDC. The fund charges a 2% transaction fee and an annual expense ratio of 2.9%, significantly higher than the 0.75% fee for the ARK Innovation ETF.
The ARKVX token represents shares of the ARK Venture Fund, structured as a closed-end interval fund. Unlike traditional ETFs, shares are not freely tradable and can only be redeemed through quarterly repurchase offers, capped at 5% of the fund's shares outstanding. Additionally, tax implications differ, as swapping Ether for USDC to buy ARKVX triggers a capital gain or loss, according to IRS guidelines.
While the fund's appeal lies in its private stakes in OpenAI and Anthropic, these holdings also pose risks. The net asset value relies on estimates until the companies go public, which could either validate or undermine the current valuations. Experts suggest waiting for these IPOs to buy shares directly, avoiding the higher fees and limitations of the tokenized fund.
ARK Invest notes that retail investors can already access ARKVX shares through conventional platforms without needing a crypto wallet. For most investors, the token version of the fund adds unnecessary fees and complexity without significant benefits.