New Listings: A Space Venture Firm's Two Best Ideas Went Public, So It Launched an ETF

For a decade, the only way to own the interesting part of the space economy was to know a venture capitalist. That stopped being true rather suddenly, and the venture capitalists have responded by opening a shop on the high street.

Seraphim New Space UCITS ETF (SERA, London Stock Exchange)

Seraphim is a space venture capital house. It runs private funds, it runs a listed investment trust, and it built its reputation doing the genuinely difficult work of valuing satellite companies that had no revenue and one customer. Its edge was access. If you wanted exposure to the companies that mattered, you went through someone like Seraphim, and you accepted that you would not see your money again for years.

Then the companies listed. The largest launch business on earth now has a Nasdaq ticker and a valuation in the trillions. The radio-frequency analytics operator whose private funding round Seraphim itself co-led now trades on the New York Stock Exchange. Two of the crown jewels of private space became things any retail investor could buy on a phone, and the access premium evaporated.

So Seraphim has launched a long-only ETF holding roughly two dozen space names across launch, satellite communications, Earth observation and space domain awareness. This is not a cynical product. The firm knows this sector better than almost anyone, and the closed-end route was not a comfortable ride for its investors, who spent a long stretch staring at a very wide discount before defence contracts and portfolio marks eventually closed it. A wrapper that trades at NAV rather than at whatever sentiment decides is a reasonable answer to that.

There is a structural comedy in it, though. Diversification rules will not let any single holding run away with a UCITS fund, so no more than a tenth of a pure-play space ETF can sit in the company that is, by most measures, the majority of the space economy. The fund is obliged by regulation to be less interested in the biggest space company than the space industry is. Everything else has to be filled in with the other twenty-two.

T. Rowe Price Securitized Income ETF (TSCZ, NYSE)

Securitised credit is the asset class that gave us the last global financial crisis, and it is a testament to the industry's institutional memory that it now comes in a low-cost wrapper aimed at financial advisers.

To be clear, this is a perfectly sensible strategy. Agency and non-agency mortgages, asset-backed paper, commercial mortgage bonds and collateralised loan obligations are exactly where active management earns its fee, because the market is fragmented, the analysis is genuinely hard, and the indices are close to useless. If you were going to pay someone to pick bonds, this is the corner where picking actually matters.

The wrapper is the fun part. Securitised credit trades by appointment in stressed markets. An ETF promises continuous liquidity in all markets. That gap is not a flaw in the product so much as a wager about how many people will want out at the same time.

Schroder US Equity Active UCITS ETF (SUSI, London Stock Exchange)

A British asset manager is now selling actively managed American large-cap equity to European investors for twenty basis points, which is roughly what a passive fund cost not very long ago.

The strategy behind it is a long-running quantitative core approach, aiming to beat the S&P 500 over rolling three-to-five-year periods. The pitch is not exotic and the fee is not greedy. It is simply another data point in the European active ETF land rush, where the marketing word "active" is being attached to strategies that hold hundreds of stocks and track fairly closely to the benchmark, at a price that makes the whole question of whether it works academic for a while yet.

PGIM Jennison Small-Mid Cap Core Equity ETF (PJSM, NYSE)

And here, at the end, is the product that nobody will write about.

Small- and mid-cap American equities have been unloved for so long that "unloved" has stopped being a contrarian pitch and become a simple description. Jennison is a house known for growth investing, and this is a core mandate, which means the fund is being asked to own the boring half of the universe as well as the exciting half, in a market segment that has spent years being ignored in favour of ten very large companies.