By Thomas Kostigen
“Space: the final frontier. These are the voyages of the starship Enterprise. Its five-year mission: to explore strange new worlds. To seek out new life and new civilizations. To boldly go where no man has gone before!”
Those are the famous opening lines to the television series Star Trek. They were first uttered in 1966, but they are perhaps even more resonant and relevant now as space activity booms: Elon Musk is launching space satellites with frequency; Sir Richard Branson is performing commercial space flights; and the United States has created a Space Force.
To be expected, space investing has taken off, too. Earlier this month, New York-based ARK Investment Management announced that it is sponsoring an exchange-traded fund that invests in space exploration. It joins UFO (no joke), another ETF that is looking to profit on the space race.
Funds clearly are promoting the “sizzle” more than the “steak” of space investing for the moment. There aren’t really any pure plays space stocks that are profitable for the time being. Indeed, Virgin Galactic, arguably the only pure space play stock, has produced about a million dollars in revenue and is incurring losses.
US News & World Report counts several other companies that give investors exposure to the space industry, yet space isn’t their core business. Some of the names will be familiar: Northrop Grumman, Nokia, Iridium Communications, Aerojet Rocketdyne, along with S&P’s Kensho Final Frontiers Index that holds Lockheed, Teledyne, and Honeywell, among other aerospace (not just space) holdings.
So, are any of these about to rocket? ProcureAM’s UFO ETF has already taken off, nearly doubling over the past year. It soared on ARK’s Securities and Exchange Commission filing.
ARK is a multibillion-dollar asset management firm known for investing in disruptive industries. Its flagship fund returned 153 percent last year, which makes its foray into the space industry worth a look. There is no way a hot fund manager would enter a market full of duds. It would aim to create buzz and ride the tide of investment optimism in a sector. Space provides that fanfare.
Indeed, just the announcement of ARK’s entrance into the space market sent UFO’s shares higher and brought in millions of dollars in new investments. People see UFO as a first mover while ARK buoys the industry.
Andrew Chanin, ProcureAM’s chief executive told MarketWatch that he is glad for the ARK competition because it raises awareness of space investing in general.
“The space industry is critical, both from a national security standpoint and for our own human competence,” Chanin told MarketWatch. “But it historically has not received the investment dollars for what it needs to take the next leap. There are so many early-stage technologies and companies out there and what we’re doing and what ARK’s doing is fantastic and essential. Hopefully that will encourage the next wave of entrepreneurs and bright minds to come to the field.”
To be sure, investors should have a financial advisor vet whether space investing is right for them. The field of investment candidates is narrow. But if industry observers are right, investors may be able to shoot for the moon with their portfolios.
Thomas Kostigen is a contributing writer to MyPerfectFinancialAdvisor, the premier matchmaker between investors and advisors. Thomas is a best-selling author and longtime journalist who writes about environmental, social, and governance issues.
