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Is The World’s First Space ETF, UFO, About To Take Off?

Is The World’s First Space ETF, UFO, About To Take Off?

Is it a bird? Is it a plane? Is it responsible for that creepy metal monolith that was found in the Utah desert last week? 

Nope, it’s just a really cool ETF that has soared 20% in November. 

This article was originally published on MyWallSt — Investing Is for Everyone. We Show You How to Succeed.

The Procure Space ETF, which I will henceforth only address by its awesome ticker symbol, UFO, is the first-ever global ETF to give investors access to the growing space industry. It has soared nearly 20% in November amid some positive tailwinds, which include SpaceX’s historic Crew-1 launch with NASA, the first of its kind conducted by a private company.

UFO’s top five holdings are: 

  • Orbcomm at roughly 6.5%. 
  • Virgin Galactic at over 6%. 
  • SES at nearly 6%.
  • Maxar Technologies at about 5% 

Trimble at almost 5%. 

Could there be further growth on the horizon for this exciting sector following the election of Joe Biden to the Oval Office?

 

What does the presidency mean to the space sector?

In the words of Andrew Chanin, co-founder and CEO of ProcureAM:

“Space … isn’t something that is bipartisan. It’s nonpartisan, so, we believe that space is something that’s here to stay and should and will be potentially a priority for any administration in the future.”

A Biden administration has promised to tackle two issues quite clearly: 

  • Climate change
  • International relations

While the Trump administration set a strong base to push the space industry forward, both from a commercial and military and defense standpoint, the Biden administration will likely continue to prolong the new age of human spaceflight and steer NASA and the National Oceanic and Atmospheric Administration towards studying the impacts of climate change. Private space ventures will be at the forefront of this new initiative, opening up brand new streams of revenue for some.

Likewise, space has always been a collaborative venture among international agencies. Perhaps, under a Biden administration, we’re going to see not just a focus on research and development and traditional NASA-style space exploration, but more focus on international cooperation around infrastructure.

At its very base purpose, putting satellites in space has never been more important as they directly improve communications, aerospace and defense, and wireless communications, which account for more than 70% of the 31 stocks in UFO’s portfolio.

So, as these technologies start to rely more and more on using satellites to transfer data from point A to point B, it’s something that could become a very large player in the space sector, and UFO is positioned perfectly as a tidy little collection of otherwise risky space stocks. 

Perhaps this ETF is one small step for you now, but one giant leap for your portfolio’s future?

 

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Disclaimer Past performance is not a reliable indicator of future results.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.

*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.

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