Procure Space ETF Launched To Give Investors Stake In Growing Space Industry

Space Industry
SpaceX booster rocket engines approach their landing pads (Photo: Reuters)

In light of the recent developments in the ever-growing space industry, a new exchange-traded fund (ETF) has now been launched for global investors. The ETF, called the Procure Space ETF, will give investors a chance to own a stake in the rapidly growing industry spearheaded by companies such as Elon Musk's SpaceX and Virgin Galactic. As it stands, the industry is estimated to be worth more than US$400 billion, attracting global investors who want a piece of the action.

According to ProcureAM, the company that issued the new ETF, the entire space industry is still relatively new. However, it has shown itself to be somewhat commercially viable, given the string of recent developments in the field. Prior to the launch of the ETF, only the most affluent investors and institutions had the opportunity to invest in these private companies.

Investments in space-related companies have ballooned in recent years, with some reports estimating that around US$20 billion may have been injected into the industry in the last decade alone. New York-based investment firm, Space Angels, reported that over US$1.7 billion has been invested from 29 rounds of financing in the first quarter of 2019 thus far.

ProcureAM's CEO, Andrew Chanin, mentioned that firms such as SpaceX, Rocket Lab, and Blue Origin, has been continually making headlines with their progress in their respective markets. Unfortunately, there simply hasn't been any way for most people to invest in those companies. This is mainly the reason why Chanin and his company had decided to launch the new ETF, which is aptly traded under the ticker "UFO."  

The issuance of the Procure Space ETF was a collaborative effort by ProcureAM and the Space Investment Services, which is run by the former director of the Space Foundation, Micah Walter-Range. The fund will include 30 major companies in the field, most of which derive the majority of their revenues from the space business. This will automatically exclude large defense and aerospace firms such as Lockheed Martin and Boeing. While these companies do generate billions from their various space projects, the revenue from those projects actually only accounts for a small percentage of the companies' total earnings.

By adopting this strategy, the fund itself will typically not have too much exposure. According to Chanin, UFO will provide a completely different investment vehicle that is low cost and diversified.  

The fund is also not limited to companies based in the United States but is open to all firms that deal with anything related to the space business. The companies included in the fund range from satellite communication firms such as Iridium and Inmarsat to industrial manufacturers such as Airbus. 

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