A 'Space ETF' Hopes Its Trading Symbol (UFO) Isn't a Warning -- Journal Report
July 08 2019 - 10:32PM
Dow Jones News
By Gerrard Cowan
Fifty years after Apollo 11 landed on the moon, a new
exchange-traded fund is reaching for the stars.
Procure Space ETF blasted off in April, bearing the ticker UFO.
The fund has gathered just over $8 million in assets under
management as of the end of June.
UFO aims to invest at least 80% of its assets in companies that
derive a majority of their revenue from space-related activities,
says Andrew Chanin, chief executive of fund manager ProcureAM. This
includes satellite manufacturers, where the space-related nature of
the work is clear. However, it can also include companies in
sectors like telecommunications or television, so long as they rely
on space-related activities. The fund's top 10 holdings include
names like satellite manufacturer Maxar Technologies and Iridium
Communications, which oversees the global Iridium constellation of
communications satellites. About 20% of the fund is invested in
companies that are heavily involved in the space business without
it being their main focus -- Airbus and Boeing, for instance.
The goal is to provide investors with access to a rapidly
growing industry, says Mr. Chanin. He points to research from
Morgan Stanley, published in November, that predicted the global
space industry could generate $1.1 trillion or more in revenue by
2040, up from $350 billion today. Mr. Chanin says he is
particularly excited by the opportunities presented by satellite
delivery of broadband internet access.
UFO provides a convenient way to access an exciting theme, says
Neena Mishra, director of ETF research at Zacks Investment
Research. However, she notes that many of the high-profile
companies in the growing industry -- such as Space Exploration
Technologies Corp., Blue Origin and Virgin Galactic -- are
privately owned, and so unavailable through the fund, though they
do have some partnerships with public companies.
Mr. Cowan is a writer in Northern Ireland. He can be reached at
reports@wsj.com.
(END) Dow Jones Newswires
July 08, 2019 22:17 ET (02:17 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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