Advisors and their clients seeking “the right stuff” should take note – the global attention focused on NASA’s historic Artemis II is also putting Exchange Traded Funds with space exposure into the spotlight.
The mission marks the first crewed lunar spaceflight by U.S. astronauts since Apollo 17 in 1972. The Artemis II launch from Kennedy Space Center on Wednesday evening sent three American astronauts and one Canadian on an approximately 10-day mission around the Moon.
“There should be an appreciation for this event, as it marks a new phase in space exploration and the search for transformative technologies,” Matthew Bartolini, managing director at State Street Investment Management, told InvestmentNews. “Many investors are focused on other bespoke themes, such as AI or robotics, but the race for space has both of those technologies underpinning it.”
“With that in mind, to participate in this theme, investors should understand if their portfolio has the right stuff,” he added.
In particular, Bartolini highlighted two of the asset management giant’s ETFs with space industry exposure – the State Street SPDR S&P Aerospace and Defense ETF (Ticker: XAR) and the State Street SPDR S&P Kensho Final Frontiers ETF (Ticker: ROKT). Both funds have NASA Artemis partners Lockheed Martin Corp. (Ticker: LMT) and L3Harris Technologies Inc. (Ticker: LHX) among their top holdings. The SPDR S&P Kensho Final Frontiers ETF also has Northrop Grumman Corp. (Ticker: NOC), which produces key components for the Orion spacecraft’s launch abort system, as a top holding.
The XAR ETF has $5.52 billion in assets under management and has had $1.65 billion of inflows over the last year, according to State Street’s Bartolini. The ROKT ETF has $77.18 million in assets and $32.13 million of inflows year-to-date “as interest in space has increased ahead of the Artemis launch,” Bartolini told InvestmentNews.
Andrew Chanin, CEO of ProcureAM, the issuer of the Procure Space ETF (Ticker: UFO) told InvestmentNews that while it’s tough to tell whether recent activity was fueled purely by Artemis, UFO hit a new intra-day all-time high price of $48.92 last week. On the same day, March 25, ProcureAM also a record volume of 1.1 million shares traded, he added.
"The Artemis mission serves as a critical moment for Boeing/Northrop's SLS [Space Launch System rocket] and Lockheed's Orion [spacecraft], with human lives in the balance,” said Chanin.
The commercial space landscape is also shifting. Chanin noted that United Launch Alliance, a joint venture between Lockheed Martin and Boeing, has historically relied overwhelmingly on government spending, but more recently, has expanded into commercial ventures, such as supporting Amazon's Project Kuiper satellite constellation.
Other space-focused funds include the Ark Space & Defense Innovation ETF (Ticker: ARKX). The active-equity fund, which has L3Harris Technologies Inc., Rocket Lab, Teradyne Inc. (Ticker:TER), and Kratos Defense & Security Solutions, Inc. (Ticker: KTOS), and as its top holdings.
At the Exchange ETF conference last month Jan van Eck, CEO of VanEck told InvestmentNews that the asset manager is bringing its VanEck Space Innovators UCITS ETF (Ticker: JEDI) to the U.S.
The fund’s holdings are focused on reusable rockets, low-cost satellites, space tourism, climate study, and greenhouse gas monitoring. The fund, which has only been available in Europe to European investors, was launched in June 2022.
This week Tema ETFs launched its Tema Space Innovators ETF (Ticker: NASA). The ETF's top holdings include AST SpaceMobile Inc. (Ticker:ASTS) and Rocket Lab Corp. (Ticker: RKLB). The fund also offers SpaceX exposure through a special purpose vehicle (SPV) provided by Forge, a subsidiary of Charles Schwab.
Space ETFs have also been in the spotlight amid months of swirling chatter about a possible SpaceX IPO. This intensified Monday when Bloomberg reported that Elon Musk’s private space company has filed confidentially for an IPO.
SpaceX has not yet responded to a request for comment on this story.
Choice anxiety, prestige bias, and the temptation to make selections based on outsourced confidence are just some of the parallels between investing and the world of wine tasting.
Regulators found Bank of America's monitoring software had a known flaw Merrill left uncorrected for years.
While AI has become a go-to research tool for affluent investors, new HSBC research suggests human advisors remain the deciding voice when investment decisions are made.
A 5-4 ruling preserves the Federal Reserve's independence for now, but the legal fight over presidential removal power is far from settled.
For years, large firms have been facing penalties and questions from regulators over interest rates for clients’ cash accounts.
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.
