Space ETFs in the spotlight as potential SpaceX IPO looms

Space ETFs are garnering greater attention amid the possibility of a mega-IPO from SpaceX that could value Elon Musk’s company at an eye-popping $1.75 trillion.

Last week Reuters reported that SpaceX is leaning toward a Nasdaq listing in what could be a record IPO. The outlet has previously reported that the offering could come as early as June. SpaceX has not yet responded to a request for comment from InvestmentNews.

Andrew Chanin, CEO of ProcureAM, the issuer of the Procure Space ETF (Ticker: UFO), told InvestmentNews that all this attention is great for his fund. “There’s a lot of great stuff going on for the space industry and no shortage of positive news stories and asset growth,” he said. Chanin noted, in particular, that the SpaceX chatter means that a lot of people are looking at the public space market.

The fact that investors have had very limited access to privately-held SpaceX has also contributed to the current IPO buzz swirling around the spaceflight giant. Chanin also pointed to the impact of conflicts in recent years, from Russia and Ukraine to the Iran war, which have highlighted the importance of satellite communications and sophisticated space-based military technology. “Space is universally deemed as the high ground for military now,” he said.

The Procure Space ETF was launched in 2019 and is described by Chanin as “the world’s first pure play space ETF.”

The ETF has 51 equity holdings, which include MDA Space Ltd. (Ticker: MDA.TO), Planet Labs PBC (Ticker: PL), Viasat Inc. (Ticker: VSAT), Rocket Lab Corp. (Ticker: RKLB), and AST SpaceMobile Inc. (Ticker: ASTS). The fund has generated year-to-date returns of 14.6% and returns of 100.7% over the last 12 months.

Would Chanin add SpaceX equity to the fund? “As long as it fits the methodology and is added by the index, then it’s our mission to replicate that,” he said.

Aside from the next chapter for SpaceX, Chanin is also keen to forge closer links with the advisor community. “For us, we’re hoping to get approved on more investor platforms,” he said. “It could increase the potential pool of investors that can invest in the fund.”

Other space-focused funds include the Ark Space & Defense Innovation ETF (Ticker: ARKX). The active-equity fund, which has L3Harris Technologies Inc. (Ticker: LHX), Kratos Defense & Security Solutions, Inc. (Ticker: KTOS), and Rocket Lab as its top holdings, has delivered year-to-date returns of 5.3% and returns of 72.7% over the last 12 months.

At the Exchange ETF conference this week 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. “We have filed for a space ETF here,” he said, adding that the filing was last week.

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.