Profit on an Emerging Sector with This One Pick

The United Kingdom’s English Midlands would seem to be an unusual location for a next-generation tech breakthrough.

After all, the region is half a world away from Silicon Valley. Not only that, but the largest city in the region, Coventry, is a medieval cathedral city and former auto-making hub that has been in decline for years.

And yet, the area is about to host a major transport breakthrough.

It will, for several weeks, be the first-ever fully functional “vertiport” – a hub for flying taxis.

These are electric-powered vertical takeoff and landing craft (eVTOLs) that backers are talking up as the biggest new thing in aviation.

The tests are designed show the practicality of eVTOL hubs – a “proof of concept” that will be essential for the nascent industry to attract users.

Make no mistake: This technology is set to disrupt the $50 billion commercial helicopter segment.

And today, I’m going to reveal a great way to play the coming boom in personal air mobility with an investment that covers a wide range of air and space travel…

One Way to Profit on an Emerging Sector with One Pick

Coventry’s new hub for eVTOLs was created by London-based startup Urban-Air Port Ltd. and has all the functions and amenities that one of these vertiports will have.

The only thing missing is the actually flying taxis. Not for lack of trying, mind you – there are dozens of startups currently trialing eVTOL vehicles.

There’s a catch: None of the vehicles have regulatory approval from the U.K. Civil Aviation Authority. Approval is expected as the concept is proven over the next few years, so, for its trials, the Coventry vertiport will use unmanned drones instead of five-person eVTOLs.

And it’s a pretty powerful demonstration. It’s a circular building just 150 feet across, surrounded by parking spaces and EV charging spots. The eVTOLs take off and land vertically from a “donut hole” in the middle of the building.

The whole construction shows just how small a vertiport could be while allowing commuters and travelers to easily drive there, jump into an eVTOL, and take off to a neighboring city at a fraction of the cost and hassle of an airplane.

Urban-Air Port plans to build 200 vertiports like this and is already in talks for 65 of them. The ink is dry on solid deals for 13 vertiports.

Make no mistake. Solving the issue of where eVTOLs will take off from and where they will land is crucial for their success.

To get approval from regulators, landowners, and customers, eVTOL companies have to balance several competing interests.

Most importantly, to beat out just taking a car or train, or driving to the airport, these air taxis have to be accessible. That means they need to land on rooftops, parking garages, in easy-to-reach parking lots, and so on.

Without that, the appeal of an eVTOL goes away.

But having landing spots that close to where people work and live will require eVTOLs to be very quiet, and very safe. No landowner or regulator will agree to let air taxis into cities otherwise.

See, the airspace above major cities like New York or London, where eVTOL startups see a lot of their early adopters coming from, is already packed. Getting approval to fly there is likely, but it will require negotiations, more demonstrations like the one in Coventry, and some patience.

Inventors and investors both are convinced these issues will get solved. The most advanced eVTOL prototypes are already very quiet and very safe.

No wonder, then, that no less than five firms in the eVTOL space have gone public in the last year. We’ve got our eyes on them and will follow up when any of these pure plays look to make a good investment.

But right now, the best way to make money from this field is with ARK Space Exploration & Innovation ETF (ARKX).

Why This Is the Best Play for eVTOLs Right Now

Led by Cathie Wood, a visionary tech investor with a focus on cutting-edge developments, ARKX focuses on companies in aviation, space travel, space exploration, and related services.

Now, this is no passive, index-tracking ETF. Like all of Wood’s ARK funds, ARKX is actively managed. That means Wood and her team monitor every single holding, and are constantly on the lookout for the next exciting startup to add to the fund’s holdings.

Right now, ARKX holds around 35 stocks. Among them are the usual suspects like the European giants Airbus SE (EADSY) and Thales SA (THLLY), as well as America’s Lockheed Martin Corp. (LMT).

Those are great plays on aviation and space exploration in general. But when it comes to eVTOLs, nothing beats ARKX’s selection, which includes:

  • Joby Aviation Inc. (JOBY), a small-cap eVTOL pure-play that’s very exciting, but also quite speculative at this point. The firm’s eVTOL prototypes have flown over 1,000 times over 10 years, and are designed for a 200mph top speed, a 150-mile range, and to be only as loud as a conversation – all while carrying four passengers and a pilot. Joby just signed a deal with All Nippon Airways Co. to cut the travel time to and from Tokyo’s Kansai airport from one hour down to 15 minutes.
  • Blade Air Mobility Inc. (BLDE) is a company that has accomplished something close to what eVTOL companies want to do but with current technology. The Blade app allows people to book helicopter and seaplane flights in and around major Northeast and West Coast cities and travel destinations as if they were regularly scheduled flights. But behind the scenes, Blade actually charters these flights for when demand is high. The company has been buying up competitors in Europe and has already ordered several eVTOLs it will use to transform its services.
  • Archer Aviation Inc. (ACHR) is a designer of eVTOLs that’s already scored an order of a whopping 200 vehicles from United Airlines. The airline will use Archer’s eVTOLs to make it easier for people to get to and from airports, and expects to start that service within five years.
  • Spirit Aerosystems Holdings Inc. (SPR), based in Kansas, is the world’s largest manufacturer of parts for airplanes and helicopters. But it can tell where the wind is blowing – and is already working with eVTOL startups to help them design, manufacture, and test parts, systems, and whole vehicles. Spirit is perfectly positioned to help and profit from the transition into smaller, nimbler, cleaner eVTOLs.

Of course, the ARKX fund has come under pressure along with the rest of the market. But you should at least have it on your watchlist because this exciting ETF is a great play on a new field that will be growing for many years to come.

Cheers and good investing,

— Michael A. Robinson

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Source: Strategic Tech Investor