SpaceX's launch of NASA astronauts aboard the SpaceX Crew Dragon was scrubbed Wednesday due to poor weather, but it's rescheduled for Saturday and the event is renewing interest in space-related investments.
In a world littered with thematic exchange-traded funds, best believe there are some products that play on the space theme. Actually, some of these funds are dedicated to space-related investing. Perhaps it was coincidence or just following the broader market higher, but some of these ETFs traded higher yesterday in anticipation of the Crew Dragon launch.
There are some compelling factoids pertaining to space investing. In the satellite industry, launches are a $6 billion annual business while the manufacturing side is valued at $20 billion.
Here are some space ETFs to consider.
The Procure Space ETF /zigman2/quotes/210596625/composite UFO -2.45% is the first and only ETF dedicated to the space theme even though it's just a few weeks removed from its first birthday. The aptly-tickered UFO follows the S-Network Space Index. Fortunately, that index has some qualifiers for inclusion that ensure UFO isn't a technology fund in disguise and offers legitimate space purity.
“A company is considered to be in a space-related business if its product(s) either has as its essential purpose — or is dependent upon — space-based functions (the revenue produced by space related companies is referred to as space revenues),” according to Procure. “In the case of companies that make products that go into space (such as launch vehicles), or companies that operate systems in space (such as satellites), the space-related nature of the business is clear.”
Bottom line: at least 80% of UFO's holdings generate at least half their revenue from space-related endeavors.
Give issuers of space ETFs some credit because they do come up with nifty tickers as highlighted by USO and the SPDR S&P Kensho Final Frontiers ETF /zigman2/quotes/207815390/composite ROKT +0.46% .
Space is often called the final frontier but the S&P Kensho Final Frontiers Index — ROKT's benchmark — isn't confined to space as it includes exposure to companies with oceanic exploration footprints.
With the ocean/space combination, ROKT is a focused fund with just 25 holdings and it doesn't have the revenue filters found on UFO as some of the SPDR fund's holdings are traditional, large-cap aerospace and defense companies. Still, ROKT is rocketing higher with a gain of more than 12% over the past week.
The ARK Innovation ETF /zigman2/quotes/204808965/composite ARKK -4.13% isn't a space ETF in the purest sense, but remembering that SpaceX is part of Tesla /zigman2/quotes/203558040/composite TSLA -10.28% , ARKK is relevant in this conversation because, at almost 10%, it has one of the largest Tesla weights among all ETFs.
ARKK, the largest equity-based actively managed ETF by assets, is disruptively diverse as it features exposure to genomics, fintech, automation and artificial intelligence companies, among others.
The recipe is working as ARKK is up 25% year to date.
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.