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June 2, 2020, 7:50 a.m. EDT

As SpaceX sends Americans into orbit, investors can take this ETF to a new frontier

The SPDR S&P Kensho Final Frontiers ETF focuses on spacecraft, launch vehicles, rockets and satellites

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By Philip van Doorn, MarketWatch


AP
In this image provided by NASA, a SpaceX Falcon 9 rocket, with the company's Dragon crew capsule onboard, is illuminated on the launch pad at Launch Complex 39A just before the successful launch for NASA's SpaceX Demo-2 mission, Saturday, May 30, 2020, at the Kennedy Space Center in Cape Canaveral, Fla.

If you’re an investor who doesn’t want to miss out on the next big trend, you had better pay attention to what’s going on in space.

When people think about the space business, they may be excited that on Saturday the U.S. finally regained the ability to send people into orbit. That’s a matter of pride. NASA and SpaceX successfully launched two astronauts into Earth’s orbit Saturday at 3:22 p.m. ET. Elon Musk, CEO of electric-car maker Tesla /zigman2/quotes/203558040/composite TSLA -2.35% , also is CEO of SpaceX, which isn’t publicly traded.

More on the mission: SpaceX set to launch U.S. astronauts into space

Many investors don’t take space seriously, despite watching technological developments lead to incredible growth for so many companies, and their shareholders, over the past several decades.

Analysts at Morgan Stanley expect the space industry’s annual global revenue to exceed $1 trillion a year by 2040 , from the current estimate of about $350 billion.

The SPDR S&P Kensho Final Frontiers ETF /zigman2/quotes/207815390/composite ROKT +1.71%  “seeks to cover all aspects of what space exploration can be,” according to Matthew Bartolini, the head of SPDR Americas research at State Street Global Advisors.

In addition to investing in companies that produce spacecraft, launch vehicles, rockets, satellites, infrastructure and mission-support services, the ETF also invests in companies involved with deep-sea exploration.

An explanation of ROKT’s passive strategy is below. Here’s a list of all 24 of the ETF’s holdings as of the market close May 28:

Company Ticker Industry Share of portfolio Total return - 2020
Maxar Technologies Inc. /zigman2/quotes/201591991/composite MAXR Aerospace & Defense 7.0% -6%
Raytheon Technologies Corp. /zigman2/quotes/203237915/composite RTX Aerospace & Defense 6.8% -23%
Teledyne Technologies Inc. /zigman2/quotes/203527738/composite TDY Aerospace & Defense 6.1% 7%
Lockheed Martin Corp. /zigman2/quotes/200691238/composite LMT Aerospace & Defense 6.0% 3%
L3Harris Technologies Inc /zigman2/quotes/201997607/composite LHX Aerospace & Defense 5.7% 0%
Northrop Grumman Corp. /zigman2/quotes/205518355/composite NOC Aerospace & Defense 5.7% 0%
CACI International Inc Class A /zigman2/quotes/205763384/composite CACI Information Technology Services 5.5% 0%
Aerojet Rocketdyne Holdings Inc. /zigman2/quotes/205342146/composite AJRD Aerospace & Defense 5.2% -4%
Mercury Systems Inc. /zigman2/quotes/204481634/composite MRCY Electronic Equipment/Instruments 5.1% 28%
Heico Corp. /zigman2/quotes/207361354/composite HEI Aerospace & Defense 4.8% -9%
Ball Corp. /zigman2/quotes/209031515/composite BLL Containers/Packaging 4.4% 9%
BWX Technologies Inc. /zigman2/quotes/200150322/composite BWXT Electric Utilities 4.1% 3%
Analog Devices Inc. /zigman2/quotes/201631938/composite ADI Semiconductors 3.8% -6%
Jacobs Engineering Group Inc. /zigman2/quotes/209082472/composite J Engineering & Construction 3.8% -6%
Amphenol Corp. Class A /zigman2/quotes/207999687/composite APH Electronic Components 3.6% -12%
General Dynamics Corp. /zigman2/quotes/208560027/composite GD Aerospace & Defense 3.3% -15%
TransDigm Group Inc. /zigman2/quotes/203902625/composite TDG   Aerospace & Defense 3.0% -23%
ESCO Technologies Inc. /zigman2/quotes/208880925/composite ESE Aerospace & Defense 2.9% -10%
TTM Technologies Inc. /zigman2/quotes/210395673/composite TTMI Electronic Components 2.6% -23%
Hexcel Corp. /zigman2/quotes/209574944/composite HXL   Aerospace & Defense 2.6% -51%
Boeing Co. /zigman2/quotes/208579720/composite BA Aerospace & Defense 2.5% -54%
Moog Inc. Class A /zigman2/quotes/210100990/composite MOG.A Aerospace & Defense 2.0% -35%
TechnipFMC PLC /zigman2/quotes/207530935/composite FTI Oilfield Services/Equipment 1.6% -63%
Standex International Corp. /zigman2/quotes/205692259/composite SXI Miscellaneous Manufacturing 1.0% -29%
Ducommun Inc. /zigman2/quotes/206978147/composite DCO Aerospace & Defense 0.7% -36%
Source: FactSet

You can click on the tickers for more about each company.

Bartolini, in an interview, said some of the same technologies developed for deep-sea exploration will be used in asteroid mining and planetary exploration. He pointed to Department of Defense budgeting, where expects “specific carve-outs” for deep-sea exploration.

Stock selection

The SPDR S&P Kensho Final Frontiers ETF tracks the S&P Kensho Final Frontiers Index. Kensho was acquired by S&P Global Market Intelligence in 2018. Kensho created the natural-language algorithm that scans companies’ filings to identify which ones should be included in the index. The screening not only looks for key words, but also for their placement to make sure industry selections are appropriate.


State Street Global Advisors
Matthew Bartolini, head of SPDR Americas research at State Street Global Advisors.

Bartolini explained that after the screening, the index is “built by overweighting the core companies,” such as Boeing Co. /zigman2/quotes/208579720/composite BA +5.52%  and Lockheed Martin Corp. /zigman2/quotes/200691238/composite LMT +0.94% , “which are very much involved in space exploration.” The index, and the ETF, place a lower weighting on what Bartolini calls “ancillary plays” such as Ball Corp. /zigman2/quotes/209031515/composite BLL -0.26% , which makes packages used for aeronautical food and beverages.  

/zigman2/quotes/203558040/composite
US : U.S.: Nasdaq
$ 1,418.57
-34.14 -2.35%
Volume: 7.52M
Aug. 10, 2020 4:00p
P/E Ratio
738.26
Dividend Yield
N/A
Market Cap
$270.73 billion
Rev. per Employee
$439,627
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/zigman2/quotes/207815390/composite
US : U.S.: NYSE Arca
$ 32.76
+0.55 +1.71%
Volume: 26,968
Aug. 10, 2020 3:58p
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/zigman2/quotes/201591991/composite
US : U.S.: NYSE
$ 24.45
-0.29 -1.17%
Volume: 1.90M
Aug. 10, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
0.16%
Market Cap
$1.51 billion
Rev. per Employee
$350,984
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/zigman2/quotes/203237915/composite
US : U.S.: NYSE
$ 64.23
+3.00 +4.90%
Volume: 10.04M
Aug. 10, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
2.96%
Market Cap
$93.54 billion
Rev. per Employee
$277,021
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/zigman2/quotes/203527738/composite
US : U.S.: NYSE
$ 329.27
+5.21 +1.61%
Volume: 174,435
Aug. 10, 2020 4:04p
P/E Ratio
31.20
Dividend Yield
N/A
Market Cap
$11.95 billion
Rev. per Employee
$267,447
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/zigman2/quotes/200691238/composite
US : U.S.: NYSE
$ 389.26
+3.64 +0.94%
Volume: 856,011
Aug. 10, 2020 4:03p
P/E Ratio
17.06
Dividend Yield
2.47%
Market Cap
$107.80 billion
Rev. per Employee
$512,019
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/zigman2/quotes/201997607/composite
US : U.S.: NYSE
$ 179.18
+3.54 +2.02%
Volume: 1.46M
Aug. 10, 2020 4:00p
P/E Ratio
24.11
Dividend Yield
1.90%
Market Cap
$37.97 billion
Rev. per Employee
$368,114
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/zigman2/quotes/205518355/composite
US : U.S.: NYSE
$ 335.73
+6.46 +1.96%
Volume: 1.02M
Aug. 10, 2020 4:00p
P/E Ratio
23.62
Dividend Yield
1.73%
Market Cap
$54.89 billion
Rev. per Employee
$354,059
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/zigman2/quotes/205763384/composite
US : U.S.: NYSE
$ 211.08
+0.20 +0.09%
Volume: 252,986
Aug. 10, 2020 4:00p
P/E Ratio
19.36
Dividend Yield
N/A
Market Cap
$5.29 billion
Rev. per Employee
$246,898
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/zigman2/quotes/205342146/composite
US : U.S.: NYSE
$ 43.13
-0.41 -0.94%
Volume: 455,135
Aug. 10, 2020 4:00p
P/E Ratio
28.09
Dividend Yield
N/A
Market Cap
$3.42 billion
Rev. per Employee
$378,877
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/zigman2/quotes/204481634/composite
US : U.S.: Nasdaq
$ 79.19
-0.08 -0.10%
Volume: 253,097
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P/E Ratio
51.03
Dividend Yield
N/A
Market Cap
$4.41 billion
Rev. per Employee
$433,597
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/zigman2/quotes/207361354/composite
US : U.S.: NYSE
$ 102.89
+2.50 +2.49%
Volume: 290,216
Aug. 10, 2020 4:00p
P/E Ratio
38.84
Dividend Yield
0.16%
Market Cap
$12.06 billion
Rev. per Employee
$340,640
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/zigman2/quotes/209031515/composite
US : U.S.: NYSE
$ 75.33
-0.20 -0.26%
Volume: 1.88M
Aug. 10, 2020 4:00p
P/E Ratio
68.45
Dividend Yield
0.80%
Market Cap
$24.62 billion
Rev. per Employee
$664,743
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/zigman2/quotes/200150322/composite
US : U.S.: NYSE
$ 58.98
+1.62 +2.82%
Volume: 516,001
Aug. 10, 2020 4:00p
P/E Ratio
20.47
Dividend Yield
1.29%
Market Cap
$5.47 billion
Rev. per Employee
$287,982
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/zigman2/quotes/201631938/composite
US : U.S.: Nasdaq
$ 116.76
+0.44 +0.38%
Volume: 3.41M
Aug. 10, 2020 4:00p
P/E Ratio
39.15
Dividend Yield
2.12%
Market Cap
$42.92 billion
Rev. per Employee
$393,887
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/zigman2/quotes/209082472/composite
US : U.S.: NYSE
$ 91.12
-0.20 -0.22%
Volume: 677,448
Aug. 10, 2020 4:02p
P/E Ratio
28.97
Dividend Yield
0.83%
Market Cap
$11.89 billion
Rev. per Employee
$189,581
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/zigman2/quotes/207999687/composite
US : U.S.: NYSE
$ 108.12
+0.16 +0.15%
Volume: 2.27M
Aug. 10, 2020 4:00p
P/E Ratio
30.14
Dividend Yield
0.92%
Market Cap
$32.21 billion
Rev. per Employee
$111,440
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/zigman2/quotes/208560027/composite
US : U.S.: NYSE
$ 156.56
+3.59 +2.35%
Volume: 1.14M
Aug. 10, 2020 4:00p
P/E Ratio
13.91
Dividend Yield
2.81%
Market Cap
$43.89 billion
Rev. per Employee
$342,737
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/zigman2/quotes/203902625/composite
US : U.S.: NYSE
$ 482.57
+7.18 +1.51%
Volume: 582,340
Aug. 10, 2020 4:00p
P/E Ratio
43.39
Dividend Yield
0.00%
Market Cap
$25.71 billion
Rev. per Employee
$391,730
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/zigman2/quotes/208880925/composite
US : U.S.: NYSE
$ 93.34
+2.69 +2.97%
Volume: 99,193
Aug. 10, 2020 4:00p
P/E Ratio
33.41
Dividend Yield
0.34%
Market Cap
$2.36 billion
Rev. per Employee
$250,460
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/zigman2/quotes/210395673/composite
US : U.S.: Nasdaq
$ 12.13
-0.20 -1.62%
Volume: 848,603
Aug. 10, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$1.32 billion
Rev. per Employee
$105,454
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/zigman2/quotes/209574944/composite
US : U.S.: NYSE
$ 42.02
+1.26 +3.09%
Volume: 847,784
Aug. 10, 2020 4:00p
P/E Ratio
18.41
Dividend Yield
0.00%
Market Cap
$3.40 billion
Rev. per Employee
$330,516
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/zigman2/quotes/208579720/composite
US : U.S.: NYSE
$ 179.41
+9.39 +5.52%
Volume: 35.86M
Aug. 10, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$95.97 billion
Rev. per Employee
$660,961
loading...
/zigman2/quotes/210100990/composite
US : U.S.: NYSE
$ 61.53
+2.23 +3.76%
Volume: 163,957
Aug. 10, 2020 4:00p
P/E Ratio
16.05
Dividend Yield
1.63%
Market Cap
$1.93 billion
Rev. per Employee
$234,267
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/zigman2/quotes/207530935/composite
US : U.S.: NYSE
$ 8.62
+0.31 +3.73%
Volume: 6.79M
Aug. 10, 2020 4:02p
P/E Ratio
N/A
Dividend Yield
1.51%
Market Cap
$3.73 billion
Rev. per Employee
$339,268
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/zigman2/quotes/205692259/composite
US : U.S.: NYSE
$ 59.58
+1.44 +2.48%
Volume: 35,330
Aug. 10, 2020 4:00p
P/E Ratio
24.16
Dividend Yield
1.48%
Market Cap
$721.48 million
Rev. per Employee
$148,724
loading...
/zigman2/quotes/206978147/composite
US : U.S.: NYSE
$ 41.45
+1.33 +3.32%
Volume: 127,370
Aug. 10, 2020 4:00p
P/E Ratio
16.24
Dividend Yield
N/A
Market Cap
$468.74 million
Rev. per Employee
$242,041
loading...
/zigman2/quotes/208579720/composite
US : U.S.: NYSE
$ 179.41
+9.39 +5.52%
Volume: 35.86M
Aug. 10, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$95.97 billion
Rev. per Employee
$660,961
loading...
/zigman2/quotes/200691238/composite
US : U.S.: NYSE
$ 389.26
+3.64 +0.94%
Volume: 856,011
Aug. 10, 2020 4:03p
P/E Ratio
17.06
Dividend Yield
2.47%
Market Cap
$107.80 billion
Rev. per Employee
$512,019
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/zigman2/quotes/209031515/composite
US : U.S.: NYSE
$ 75.33
-0.20 -0.26%
Volume: 1.88M
Aug. 10, 2020 4:00p
P/E Ratio
68.45
Dividend Yield
0.80%
Market Cap
$24.62 billion
Rev. per Employee
$664,743
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