London’s first space ETF, the Procure Space UCITS ETF (LON:YODA), is primed for takeoff this month but it is not the only one of its kind on the market.
It is a sister fund to the first ever space ETF, the Procure Space ETF (NASDAQ:UFO), which in the US is up against two other passive funds focused on the space economy, the SPDR S&P Kensho Final Frontiers ETF (NYSEARCA:ROKT) and the ARK Space Exploration & Innovation ETF (BATS:ARKX).
There are various similarities and differences between the three.
The first thing about the YODA fund is that it will be the only space ETF listed on the UK market and the first space ETF in Europe.
Like the original UFO fund, YODA is tracking the S-Network Procure Space Index. This bespoke index is skewed towards pure-play space companies, with 80% of the index weight made up of stocks that derive over 50% of their revenues from space-related businesses.
To be included on the index a company must also have a market cap of at least US$100mln and its shares must trade at least US$1mln per day.
This means there are aerospace behemoths such as Lockheed Martin, Northrop Grumman, Airbus, Raytheon, AT&T, Comcast, Thales
It is the first and only certified space data product recognised by the Space Foundation, the space exploration advocacy and education organisation.
The current top 10 holdings include Orbcomm, which owns and operates a growing network of low-Earth orbit (LEO) communications satellites and ground infrastructure; GPS specialist Garmin Ltd; Trimble, maker of satellite software and hardware for navigation and geospatial satellite industries among others; Japanese forecaster Weathernews; plus various other satellite names including France’s Eutelsat, Luxembourg’s SES and US peers Echostar and Iridium, while Virgin Galactic is the index but outside the top 10.
Over at the Kensho Final Frontiers ETF, the top 10 is dominated by bigger names with less of a pure-play tilt – and what’s more it’s frontiers are not only those up above.
The index is designed to measure the performance of companies focused on technologies “at the forefront of deep-space and deep-sea exploration and development”.
The top 10 weightings includes seven S&P 500 constituents, led by aerospace and defence groups Raytheon and Northrop Grumman and defence group L3Harris Technologies, though there are
These are followed by small and mid-caps such as propulsion and tyres group Aerojet Rocketdyne (which is being bought by Lockheed), specialist materials group Hexcel Corporation and aerospace and electronics products maker HEICO Corporation make up the top 10.
The third player in the space is the ARK Space ETF, where investment objective that pledges to invest at least 80% of its assets in companies engaged in “space exploration and innovation”, with ARK defining space exploration as “leading, enabling, or benefitting from technologically enabled products and/or services that occur beyond the surface of the Earth”.
The top 10 includes some names we’ve seen before, including Trimble, Iridiu,, L3Harris, Lockheed, Thales and Boeing.
Others include ARK’s own 3D Printing ETF; Japan’s Komats, a maker of construction, mining, forestry and military equipment; Kratos Defense & Security, which makes thing like directed-energy weapons, drones, cyber warfare tools, microwave electronics, missile defense and combat systems; and Spirit AeroSystems, manufacturer of aerostructures for planes and missiles as well as nozzles for space rockets.