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Philip van Doorn

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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 +10.78% , 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 +1.03%  “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 +2.98%  and Lockheed Martin Corp. /zigman2/quotes/200691238/composite LMT +2.73% , “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 +0.91% , which makes packages used for aeronautical food and beverages.  

/zigman2/quotes/203558040/composite
US : U.S.: Nasdaq
$ 1,544.65
+150.37 +10.78%
Volume: 23.34M
July 10, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$286.49 billion
Rev. per Employee
$439,627
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/zigman2/quotes/207815390/composite
US : U.S.: NYSE Arca
$ 29.27
+0.30 +1.03%
Volume: 7,616
July 10, 2020 3:57p
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/zigman2/quotes/201591991/composite
US : U.S.: NYSE
$ 15.99
-0.60 -3.62%
Volume: 1.27M
July 10, 2020 4:00p
P/E Ratio
8.00
Dividend Yield
0.25%
Market Cap
$963.48 million
Rev. per Employee
$350,984
loading...
/zigman2/quotes/203237915/composite
US : U.S.: NYSE
$ 59.64
+1.53 +2.63%
Volume: 10.46M
July 10, 2020 4:00p
P/E Ratio
12.56
Dividend Yield
3.19%
Market Cap
$90.43 billion
Rev. per Employee
$277,021
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/zigman2/quotes/203527738/composite
US : U.S.: NYSE
$ 296.39
+5.53 +1.90%
Volume: 360,867
July 10, 2020 4:03p
P/E Ratio
27.27
Dividend Yield
N/A
Market Cap
$10.87 billion
Rev. per Employee
$267,447
loading...
/zigman2/quotes/200691238/composite
US : U.S.: NYSE
$ 349.25
+9.29 +2.73%
Volume: 1.51M
July 10, 2020 4:02p
P/E Ratio
15.85
Dividend Yield
2.75%
Market Cap
$97.94 billion
Rev. per Employee
$512,019
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/zigman2/quotes/201997607/composite
US : U.S.: NYSE
$ 162.51
+2.71 +1.70%
Volume: 1.65M
July 10, 2020 4:00p
P/E Ratio
19.49
Dividend Yield
2.09%
Market Cap
$35.25 billion
Rev. per Employee
$368,114
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/zigman2/quotes/205518355/composite
US : U.S.: NYSE
$ 292.00
+6.05 +2.12%
Volume: 1.50M
July 10, 2020 4:00p
P/E Ratio
22.01
Dividend Yield
1.99%
Market Cap
$48.68 billion
Rev. per Employee
$354,059
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/zigman2/quotes/205763384/composite
US : U.S.: NYSE
$ 199.56
+4.02 +2.06%
Volume: 185,660
July 10, 2020 4:00p
P/E Ratio
18.30
Dividend Yield
N/A
Market Cap
$5.01 billion
Rev. per Employee
$246,898
loading...
/zigman2/quotes/205342146/composite
US : U.S.: NYSE
$ 36.00
+0.40 +1.12%
Volume: 475,953
July 10, 2020 4:00p
P/E Ratio
22.51
Dividend Yield
N/A
Market Cap
$2.83 billion
Rev. per Employee
$378,877
loading...
/zigman2/quotes/204481634/composite
US : U.S.: Nasdaq
$ 73.11
-0.34 -0.46%
Volume: 274,415
July 10, 2020 4:00p
P/E Ratio
55.61
Dividend Yield
N/A
Market Cap
$4.06 billion
Rev. per Employee
$433,597
loading...
/zigman2/quotes/207361354/composite
US : U.S.: NYSE
$ 94.84
-0.03 -0.03%
Volume: 301,486
July 10, 2020 4:00p
P/E Ratio
35.80
Dividend Yield
0.17%
Market Cap
$11.34 billion
Rev. per Employee
$340,640
loading...
/zigman2/quotes/209031515/composite
US : U.S.: NYSE
$ 72.40
+0.65 +0.91%
Volume: 916,796
July 10, 2020 4:00p
P/E Ratio
51.82
Dividend Yield
0.83%
Market Cap
$23.60 billion
Rev. per Employee
$664,743
loading...
/zigman2/quotes/200150322/composite
US : U.S.: NYSE
$ 52.10
+0.70 +1.36%
Volume: 672,226
July 10, 2020 4:00p
P/E Ratio
18.44
Dividend Yield
1.46%
Market Cap
$4.96 billion
Rev. per Employee
$287,982
loading...
/zigman2/quotes/201631938/composite
US : U.S.: Nasdaq
$ 124.50
+0.25 +0.20%
Volume: 1.77M
July 10, 2020 4:00p
P/E Ratio
41.74
Dividend Yield
1.99%
Market Cap
$45.87 billion
Rev. per Employee
$393,887
loading...
/zigman2/quotes/209082472/composite
US : U.S.: NYSE
$ 78.57
-0.28 -0.36%
Volume: 839,569
July 10, 2020 4:02p
P/E Ratio
N/A
Dividend Yield
0.97%
Market Cap
$10.22 billion
Rev. per Employee
$189,581
loading...
/zigman2/quotes/207999687/composite
US : U.S.: NYSE
$ 94.93
+0.44 +0.47%
Volume: 1.16M
July 10, 2020 4:00p
P/E Ratio
25.87
Dividend Yield
1.05%
Market Cap
$28.09 billion
Rev. per Employee
$111,440
loading...
/zigman2/quotes/208560027/composite
US : U.S.: NYSE
$ 141.97
+3.95 +2.86%
Volume: 949,248
July 10, 2020 4:00p
P/E Ratio
11.98
Dividend Yield
3.10%
Market Cap
$40.73 billion
Rev. per Employee
$342,737
loading...
/zigman2/quotes/203902625/composite
US : U.S.: NYSE
$ 420.88
+9.90 +2.41%
Volume: 413,437
July 10, 2020 4:00p
P/E Ratio
30.51
Dividend Yield
0.00%
Market Cap
$22.76 billion
Rev. per Employee
$391,730
loading...
/zigman2/quotes/208880925/composite
US : U.S.: NYSE
$ 81.93
+1.26 +1.56%
Volume: 53,292
July 10, 2020 4:00p
P/E Ratio
29.33
Dividend Yield
0.39%
Market Cap
$2.13 billion
Rev. per Employee
$250,460
loading...
/zigman2/quotes/210395673/composite
US : U.S.: Nasdaq
$ 11.33
-0.11 -0.96%
Volume: 956,174
July 10, 2020 4:00p
P/E Ratio
30.33
Dividend Yield
N/A
Market Cap
$1.20 billion
Rev. per Employee
$105,454
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/zigman2/quotes/209574944/composite
US : U.S.: NYSE
$ 42.96
+1.35 +3.24%
Volume: 655,592
July 10, 2020 4:00p
P/E Ratio
13.29
Dividend Yield
0.00%
Market Cap
$3.59 billion
Rev. per Employee
$330,516
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/zigman2/quotes/208579720/composite
US : U.S.: NYSE
$ 178.44
+5.16 +2.98%
Volume: 40.96M
July 10, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$100.70 billion
Rev. per Employee
$660,961
loading...
/zigman2/quotes/210100990/composite
US : U.S.: NYSE
$ 48.29
+2.60 +5.69%
Volume: 157,655
July 10, 2020 4:00p
P/E Ratio
8.67
Dividend Yield
0.00%
Market Cap
$1.59 billion
Rev. per Employee
$234,267
loading...
/zigman2/quotes/207530935/composite
US : U.S.: NYSE
$ 7.06
+0.25 +3.67%
Volume: 4.31M
July 10, 2020 4:02p
P/E Ratio
N/A
Dividend Yield
1.84%
Market Cap
$3.17 billion
Rev. per Employee
$339,268
loading...
/zigman2/quotes/205692259/composite
US : U.S.: NYSE
$ 53.88
+1.75 +3.36%
Volume: 95,327
July 10, 2020 4:00p
P/E Ratio
21.85
Dividend Yield
1.63%
Market Cap
$668.62 million
Rev. per Employee
$148,724
loading...
/zigman2/quotes/206978147/composite
US : U.S.: NYSE
$ 32.34
+1.34 +4.32%
Volume: 51,621
July 10, 2020 4:00p
P/E Ratio
11.60
Dividend Yield
N/A
Market Cap
$376.72 million
Rev. per Employee
$242,041
loading...
/zigman2/quotes/208579720/composite
US : U.S.: NYSE
$ 178.44
+5.16 +2.98%
Volume: 40.96M
July 10, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$100.70 billion
Rev. per Employee
$660,961
loading...
/zigman2/quotes/200691238/composite
US : U.S.: NYSE
$ 349.25
+9.29 +2.73%
Volume: 1.51M
July 10, 2020 4:02p
P/E Ratio
15.85
Dividend Yield
2.75%
Market Cap
$97.94 billion
Rev. per Employee
$512,019
loading...
/zigman2/quotes/209031515/composite
US : U.S.: NYSE
$ 72.40
+0.65 +0.91%
Volume: 916,796
July 10, 2020 4:00p
P/E Ratio
51.82
Dividend Yield
0.83%
Market Cap
$23.60 billion
Rev. per Employee
$664,743
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