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David England: Space funds: The final frontier?
Column | Eye on the Market

David England: Space funds: The final frontier?

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Last week, my 2020 Financial Entrepreneur of the year, Catherine Wood of ARK Investment Management, rocked the investing universe with her announcement of a new “Space Exploration ETF.” This fund would focus on companies “leading, enabling or benefiting from technologically enabled products and/or service that occur beyond the surface of the Earth,” the filing stated.

Since the list of companies in the proposed ETF, symbol ARKX, has not been disclosed, today I answer your questions on which funds and companies are in this space.

The top funds in this sector and a brief description including the AUM-assets under management to see the size of the fund are as follows:

UFO-Procure Space ETF tracks companies in an equity index called the S-Network Space Index, tracking companies that are significantly engaged in space-related activities, devoting 80% of the weight to a pure-play tranche. SPACE has been named the first Certified Data Product by the nonprofit Space Foundation, which uses the index in its quarterly reports as a benchmark for measuring the financial performance of the space industry. The AUM-assets under management are 50 million.

ROKT-SPDR Kenshō Final Frontiers ETF tracks companies in the S&P Kensho Final Frontiers Index. Under normal market conditions, the fund generally invests substantially all, but at least 80%, of its total assets in the securities comprising the index. What is the meaning of Kensho? It is a Japanese term from the Zen tradition, meaning an initial insight or awakening. The AUM-assets under management are 17 million.

EOM Space Funds I

To see the performance of these top companies compared to the market (SPX), I designed a chart beginning on March 24, running to real-time. UFO-Procure Space ETF took top honors with an impressive 92% return. Next, ROKT-SPDR Kenshō Final Frontiers ETF is up 81%. The market (SPX) — the green shaded area — is up 69%.

Here are the performance points: During this timeframe, both funds outperformed the market (SPX). The top fund, UFO, outperformed the market by more than 22%, while ROKT outperformed the market by 12%.

Next, I will identify the top three companies by portfolio allocation in UFO-Procure Space ETF including a brief description including the year founded and headquarter locations are as follows:

ORBC-ORBCOMM Inc. offers network connectivity, devices, device management, and web reporting applications designed to track, monitor, control, and enhance security for various assets. It also provides satellite automatic identification service including its constellation of low-Earth orbit satellites and accompanying ground infrastructure. ORBCOMM Inc. was founded in 2001 and is headquartered in Rochelle Park, New Jersey.

MAXR-Maxar Technologies Inc. provides Earth intelligence and space infrastructure solutions around the globe. The Earth intelligence segment offers Earth imagery and radar data solutions, including orthorectified imagery, mosaic, elevation, and information products. The space infrastructure segment provides space and ground-based infrastructure, robotics, components, and information solutions, including communication and imaging satellites and payloads; space platforms for power, propulsion, and communication; satellite ground systems and support services; space-based and airborne remote sensory solutions; space robotics; and defense systems. Maxar Technologies Inc. was founded in 1969 and is headquartered in Westminster, Colorado.

TRMB-Trimble Inc. provides technology solutions that enable professionals and field mobile workers to improve or transform their work processes worldwide. It operates through four segments: Buildings and Infrastructure, Geospatial, Resources and Utilities, and Transportation. Trimble Inc. was founded in 1978 and is headquartered in Sunnyvale, California.

EOM UFO Top Companies

To see the performance of these top companies compared to the market (SPX), I designed a chart beginning on March 24, running to real-time.

ORBC-ORBCOMM Inc. took top honors with an astronomical 596% return. MAXR-Maxar Technologies Inc. was not far behind, up 568%. The laggard in the group, TRMB-Trimble Inc., is up 160%. The market (SPX) — the green shaded area — is up 69%. Note the rally since last week’s ARK announcement — vertical black-slotted line.

Here are the action points: During this timeframe, all three companies outperformed the market (SPX), by a minimum of 91%. The top company, ORBC, outperformed the market by 526%. I see tremendous opportunities in this sector and am monitoring these companies, waiting for a pullback. When it happens, I will rely on my Simple Simon buy and sell system to help with my trade decisions.

Take the time to do your due diligence on each fund, which index they track, and its holdings. Research each company, determine exactly what they do and how they make their profits. Identify the remaining top companies to see if one may be next to run like ORBC, MAXR, or TRMB.

In full disclosure, I do not hold any securities listed.

Plan your work, work your plan, and share your harvest!

Many of the company descriptions are courtesy of Yahoo Finance.

David O. England is an investor/trader, financial analyst/educator/lecturer and Associate Professor Emeritus of Finance. This column is for educational purposes only and not intended as financial advice. Past performance does not dictate future returns. Questions? Send to thetraderseye@gmail.com.

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