ARKX returned more than XAR over the trailing year in the reported snapshot, but it charges more and showed greater volatility. Over four years, the funds finished almost even.
Over four years, a $1,000 investment grew to $2,568 in ARKX and $2,584 in XAR. XAR also had a smaller reported maximum drawdown. Neither result tells investors what will happen next.
Those figures point to different trade-offs. ARKX focuses on space and defense innovation. XAR takes a broader, equal-weighted approach to the industry.
Independent September 2026 reviews put ARKX's assets at roughly $760 million to $775 million. That range provides a recent estimate of the fund's scale alongside the snapshot's reported $759.5 million figure.
Cost and returns tell different stories
As of Sept. 28, 2026, the reported trailing one-year return was 15.1% for ARKX and 1.8% for XAR. Their expense ratios were 0.75% and 0.35%. On a $10,000 investment, that works out to roughly $75 versus $35 in annual fund expenses, before changes in the balance.
The fee gap persists. The return gap is historical. Nemo Money's ETF fee comparison also shows the difference in ongoing costs.
Other reported periods tell a different story. Both funds were down year to date, with XAR off 11% and ARKX nearly 13%. Annualized three-year returns favored ARKX, 30.4% to 28.8%.
These periods measure different stretches of time. Year-to-date performance covers a shorter period; annualized returns summarize several years. Past gains do not establish which fund will lead next. September coverage by Stake describes ARKX as an actively managed fund focused on space and defense innovation, in line with its specialized mandate.
The four-year comparison was close. XAR's ending value of $2,584 edged past ARKX's $2,568. XAR's maximum drawdown was 21.0%, compared with 25.5% for ARKX.
A drawdown measures a peak-to-trough decline over a period. It does not capture every loss an investor might face or predict future volatility. Investors comparing fees and growth may also find this fund fee analysis useful, though it covers different funds and exposures.
A September comparison from Mitrade lists SpaceX at about 10.2% of ARKX, followed by L3Harris at roughly 6.8% and Kratos Defense at about 6.0%. Those holdings illustrate how the fund's thematic exposure is concentrated among a relatively small group of companies.
Two distinct portfolio bets
XAR tracks the S&P Aerospace & Defense Select Industry Index. It uses a modified equal-weighting approach across 50 holdings. Its largest reported positions are Axon Enterprise at 3.6%, VSE Corp at 3.4% and RTX Corp at 3.3%.
XAR launched in 2011. The snapshot put its assets under management at $5.7 billion. That is a much larger asset base than ARKX's reported $759.5 million.
ARKX is actively managed and holds 45 companies involved in orbital and suborbital innovation. Space Exploration Technologies, or SpaceX, made up 10.2% of the portfolio. L3harris Technologies accounted for 6.8%, and Kratos Defense and Security Solutions for 6.03%.
The reported sector mix was 60% industrials, 25% technology and 10% consumer cyclical. ARKX launched in 2021.
The concentration gap is substantial. Nearly 57% of ARKX's assets were in its top 10 holdings, compared with less than a third for XAR. ARKX also held 89% in U.S. stocks and 11% in developed markets outside the country. XAR held U.S. stocks only.
One large position can make ARKX more sensitive to a company's fortunes. XAR spreads its exposure more evenly across its roster. The split is clear.
Risk changes the comparison
ARKX's reported beta was 1.42, against 1.03 for XAR. Beta estimates how a fund moved relative to the broader market during a measurement period. It does not promise that future moves will match.
ARKX also had the larger four-year maximum drawdown. Together, those measures show the practical trade-off: investors in ARKX take on more concentrated exposure and potentially sharper swings in exchange for active selection and a stronger focus on space technology.
XAR's smaller drawdown stands out alongside its reported allocation of 47% to small-cap stocks, 35% to mid-cap stocks and 18% to large-cap stocks. Smaller companies can carry meaningful risk. That allocation alone does not establish that XAR is safer.
The reported results cover a specific period. They do not show that equal weighting will protect the fund in every market decline. Not always.
What investors are buying
Investors seeking targeted exposure to space innovation get an actively managed portfolio with substantial weight in SpaceX and other named growth-oriented holdings through ARKX. The fund charges a 0.75% expense ratio. It also has a higher beta and greater measured drawdown.
XAR costs less and spreads its holdings more evenly. It also has a longer operating history. But it remains a focused aerospace and defense fund, not a broad-market portfolio.
Equal weighting limits the largest positions at a given point in time. Portfolio weights can still change as prices move and the fund rebalances. Active management gives a manager more discretion over security selection, but the fee is higher.
Neither structure removes exposure to company-specific outcomes or market swings. XAR is the stronger default for investors who put a lower ongoing cost and broader exposure across aerospace and defense holdings first. Its four-year ending value was marginally higher, and its measured drawdown was lower.
ARKX may suit investors who want an active space-innovation tilt and can tolerate concentration and volatility. The choice comes down to whether that specialized exposure justifies the added fee and risk, not which fund led a recent return snapshot.
