Page 16 - Investment Advisor - October 2021

ETF ADVISOR

By Bernice Napach

Are Space ETFs Worth Exploring?

These six ETFs are focused on public companies involved in space
exploration and aerospace.

pace may be the final frontier,
but is it a good investment, or
Seven an accessible one?
The rise of companies like Jeff Bezos’
Blue Origin, Elon Musk’s SpaceX and
Richard Branson’s Virgin Galactic has
piqued investors’ interest. But those
who choose to explore this theme
through ETFs should know what
they’re really buying.
There are about a half-dozen
ETFs that focus on public companies
involved in space exploration and aero-
space. None of them include shares
of Blue Origin or SpaceX, which are
privately held.
Richard Branson’s Virgin Galactic is
publicly traded, under the SPCE ticker,
but it’s not currently among the top 15
holdings of any of the space-linked ETFs
described below (Cathie Wood’s Ark
Space Exploration and Innovation ETF
sold its shares of SPCE earlier this year).
Also, SPCE has gained just 7% year to masses to the internet, enabling them to ARK SPACE EXPLORATION AND
date, about one-third of the appreciation access Netflix. INNOVATION ETF (ARKX)
of the S&P 500 and one-half the gains of Deere will benefit from drones and Assets under management: $672
the Russell 2000 index. weather satellites that make farming million
Another consideration for inves- more efficient, said Wood. Expenses: 0.75%
tors is how space-linked ETFs define “ARKX holds many companies not Inception date: March 30, 2021
their universe, and therefore their specifically tied to space/defense,” said Actively managed
investments. The second largest hold- Todd Rosenbluth, head of ETF and Performance: +0.7% since inception
ing in Wood’s Space Exploration and mutual fund research at CFRA. Top holdings: Trimble, Ark 3D Printing
Innovation ETF (ARKX), for example, We’ve compiled a list of space-linked ETF, Kratos Defense & Security
is the firm’s own 3D Printing ETF, and ETFs, including those that fall under the The fund invests at least 80% of its
the fund also includes companies like label of aerospace and defense because assets in domestic and foreign equity
Netflix and Deere, known for the trac- of the overlap between the two invest- securities of companies engaged in space
tors it manufactures. ment areas, and include some vital infor- exploration and innovation, including
Asked about these last two holdings mation for investors. companies that lead, enable or benefit
on CNBC in May, Wood said “the real Most of the funds are non-diversi- from technologically enabled products
money-making opportunity is not space fied. The performance data is based on and/or services that occur beyond the stefan-stefancik/unsplash
tourism [but] mobile connectivity,” the market close on Aug. 26, and the surface of the earth.
which uses satellites from companies fund descriptions are largely based on These include satellite and launch
like SpaceX to connect the unconnected Morningstar’s fund analyses. vehicle companies; companies involved

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