USA
Space exploration ETF from newcomer Procure
Procure AM, an ETF newcomer headed up Bob Tull, one of the godfathers of the US ETF industry, is listing a new product that will surely rank among the most interesting of 2018. The Procure Space ETF (UFO) will track an index from the boutique index house S-Network Space Index. The fund will invest in “companies that receive at least 50% of their revenue or profits from one or more segments of the space industry,” the prospectus says.
The index is designed to measure the performance of companies engaged in space-related industries, including:
(a) telecommunications, television and radio broadcasting,
(b) rocket and satellite manufacturing and operation,
(c) ground equipment manufacturing used with satellite systems,
(d) space technology and hardware, and
(e) space-based imagery and intelligence services.
Companies of any size and from all over the world are chosen. However, US companies will typically take up most of the weight of the index. The index uses a modified market cap weighting scheme that allows for weighting adjustments to be made based on how much money companies make from space-related activities. The index is rebalanced quarterly.
Interestingly, the fund's prospectus states that UFO will eventually invest in new industries like lunar bases and space colonies; asteroid mining and resource extraction; the militarising of space; and space tourism.
UFO will charge 0.75%.
Analysis – one small step for thematics
Investing in space is an interesting idea. While space exploration, militarisation, and the rest are not directly commercialised at present a lot of interesting inventions have been thrown out of space exploration. These include: memory foam, freeze-dried food, firefighting equipment, emergency blankets, artificial limbs – and many more. (See the Wikipedia page on NASA technology spinoffs). While it’s hard to know if the index UFO tracks will capture this spinoff tech it certainly seems worthwhile to try.
Still, one gets the impression this is a very forward-looking ETF. While new technologies targeting outer space - like asteroid harvesting and setting up lunar bases – are being developed, they’re still a long way away. Which may mean that UFO is not a product for investors with a two-year view, but instead a product for investors with a 20-year view. The long horizon makes this one of the bravest - and most interesting - thematic ETFs we've seen.
If nothing else, this fund is sure to win ticker of the year award.
Australia
Pinnacle-backed Antipodes lists global value ETMF
Antipodes Partners, an ETF newcomer, is listing an actively managed global value ETF, that packages traditional stock picking in an ETF wrapper. The Antipodes Global Shares EQMF ETF (AGX1) will invest in “30-60 attractively-priced companies listed around the world, [and embed] active currency management,” the fund’s description says. AGX1 will charge a steep 1.59% fee.