Sign up for exclusive news and analysis of the rapidly evolving ETF landscape.
Space: the final (efficient) frontier.
Global X is going extra-global, planning to launch a space ETF, according to a filing the firm made last week with the Securities and Exchange Commission. The Global X Space Tech ETF would invest in companies involved in: rocketry; space-exploration hardware and software; satellites and communication; and space tourism. (Here’s to sending more celebs to space.) The fund would include US and international companies with at least $200 million market caps, the initial prospectus states.
“It’s an important theme” from geopolitical and even consumer perspectives, said Todd Sohn, senior ETF and technical strategist at Strategas Securities. The Global X fund’s “theme has multiple angles to it, which is interesting.”
Gimme Space
There have been rushes for thematic products focused on AI, nuclear, defense and power generation, and space may be the next craze, Sohn noted. There’s good reasoning behind that. While space has always captivated the human race, it is increasingly important for communications and technology. Most recently, tech giants like Amazon and SpaceX have indicated they are plotting AI data centers beyond the blue marble.
There are but a few space ETFs on the market, but they have done well:
- The $750 million ARK Space & Defense Innovation ETF (ARKX) is up 65% over a year.
- The $293 million Procure Space ETF (UFO) is up 89%.
- The $158 million Spear Alpha ETF (SPRX) is up 42%.
Just No Xenomorphs, Please: One of the most hyped (and highly valued) private companies in the world is, of course, SpaceX. And there’s a lot of interest in that business going public. There appears to be just one US ETF that holds SpaceX, the ERShares Private-Public Crossover ETF (XOVR), which has seen dramatic inflows in anticipation of an IPO.
“You have publicly traded companies like Rocket Lab [up 208% over a year] that have had massive runs. So inevitably, when you get these high-beta stocks, it attracts some of the issuers,” Sohn said. “SpaceX is the elephant [in the room].”
