Should You Invest In The Space Race—And How?

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Is the space race worth getting in on—or are the investors in it simply stuck with their heads up in space? Whether or not you believe in UFOs or extraterrestrial life on other planets, while NASA (and now civilians) explore the universe, the space-specific stock market is something for you to explore.

In June, the Pentagon assigned a government task force to investigate “unidentified aerial phenomena” or UAPs, which reported hundreds of cases of unidentified flying objects. While the task force was unable to offer evidence that they were other-worldly, senior government officials did suggest that nearly every single incident remains unexplained.

“Whether originating from foreign adversaries or extraterrestrial activity, UAPs have potentially wide-reaching implications that we need to start taking seriously,” Andrew Chanin, co-founder and CEO of Procure Funds, the company behind the UFO ETF, told CBS. \We are truly just scratching the surface of what we know.”

He’s right: There’s so little that we know, and so much to learn, which breeds opportunities. 

Beyond investigating UAP sightings, the space industry has been quite literally skyrocketing into uncharted territory with the first civilian space flight, Inspiration4. Jeff Bezos also ventured out into the universe in the billionaire space race, aboard the maiden flight of Blue Origin’s New Shepard.

Amidst all of this increasing innovation and exploration, the Space Foundation, a nonprofit advocacy group, reported in 2020 that the global space industry is estimated at $423.8 billion with commercial space revenue representing the bulk of space activity. And Bank of America predicts that the industry revenue will grow by 230 percent to $1.4 trillion in 2030. Already, the industry has grown at an average annual rate of 10.6 percent in the last two years alone.

While companies like SpaceX, Virgin Galactic and Blue Origin all exist, they’re largely inaccessible to or pricey for the average retail investor. In 2019, the Procure Space ETF, which trades under the ticker UFO, gave investors an easy and diversified way to get invested in the evolving space industry. The exchange-traded fund consists of 30 companies in the industry.

Some other non-space-specific holdings in the ETF include navigation leader Garmin, mobile mapping company Trimble and satellite manufacturer Maxar. Satellite communications companies DISH and Sirius XM are also included in the ETF, as a hefty chunk of anticipated revenue could come from broadband communications companies alone.

“Space is an industry that I’ve been fascinated by for a long time, but it\’s only now that we have enough stocks for a diversified index,” Chanin told CNN.

The SPDR S&P Kensho Final Frontiers ETF also holds Virgin Galactic, among other companies primarily in the aerospace industry and defense contractors. Meanwhile, the Ark Space Exploration and Innovation ETF has similar securities, as well as shares of Amazon and Google, which has a stake in SpaceX. 

While investors who seek exposure to the space space might be wary of buying stock in specific companies, investing in ETFs is one surefire way to tap into the industry without the risk of betting on one company’s success in unmapped domains. Because these ETFs also carry stocks from crossover industries, they provide diversification benefits at the very least. 

Plus, a proliferation of new space stocks is the result of SPACs, special purpose acquisition companies, sometimes called “blank check companies.” SPACs offer an avenue for private companies in this arena to go public even devoid of an IPO by merging with shell companies that are already public. Read: Astra Space, which went public via Holicity; Momentus via Stable Road Capital; Rocket Lab via Vector Acquisition, Redwire Space via Genesis Park; Virgin Orbit via NextGen Acquisition II, etc.

Whether or not aliens are real, these opportunities very much are.

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