Mars attacks … the market!
There is a small but growing corner of the ETF world dedicated to extraterrestrial investing. The latest entrant is Roundhill Investments, which last week launched its Space and Technology ETF (MARS). It’s an actively managed fund focused on space-related technology, including GPS, weather forecasting and communications. Will that capture the hearts of so many investors who have gazed up at the night sky and wondered about the possibilities? More importantly, will it attract investors who haven’t given that a thought?
“Whether we know it or not, we are engaging with space-enabled technologies every day,” Roundhill ETF strategist Thomas DiFazio said, adding that much of the time, “we really have no idea.”
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Numerous aerospace and defense exchange-traded funds make investments in space technologies, but only a few are dedicated to the niche category. The biggest is the $821 million ARK Space and Defense Innovation ETF (ARKX), followed by the $358 million Procure Space ETF (UFO). Another issuer, VanEck, filed for a forthcoming Space ETF in February, which may resemble its existing Space Innovators UCITS ETF, domiciled in Ireland.
One reason for looking to invest in companies that venture beyond the blue marble: $1.8 trillion. That’s the predicted size of the global space economy by 2035, according to McKinsey and the World Economic Forum, DiFazio said. Maybe there’s something to that. UFO is up 10% year to date and up 90% over 12 months. While ARKX is up 4% so far this year, it’s gained 68% over a year.
A look at the MARS ETF:
It invests predominantly in communications and industrials, which together make up about 89% of the portfolio.
Its biggest holdings are Rocket Lab (10%), AST SpaceMobile (10%) and EchoStar (9%).
Absent from the portfolio is SpaceX, as the ETF only invests in publicly traded securities. If and when that company’s IPO happens, likely later this year, the investment committee may consider it, though it’s not a given that SpaceX will go to MARS.
Space Junk: Anyone remember the 2013 sensation that was the film Gravity, in which space debris orbiting the earth destroys a shuttle and sends Sandra Bullock’s character on a heart-pounding quest for survival? Well, there’s a company (Astroscale) in the MARS fund focused on avoiding just such a situation, by finding ways to clear space debris. “It’s like the Waste Management of the space economy,” DiFazio said. “That’s a real concern. Some of these [space craft] lose power or they have issues and are inoperable. Astroscale can step in and address some of those problems.”
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