Investors with a high financial personality score in Viewpoints tend to be lifelong learners, early adopters, and are willing to learn about technologies and trends shaping the future. When looking to the trends and themes of the future, there are few industries that incite more excitement and curiosity than space. We sat down with ProcureAM, creators of the world’s first global pure play space ETF, the Procure Space ETF (UFO), to learn more about this fascinating industry.
TIFIN Personality: Space is of course captivating in and of itself, but what is making the industry so compelling here and now?
Procure: It’s true that the space industry is as compelling as ever. Humanity’s reliance on space may feel like a distant future, but the truth is there is already a significant impact on our everyday lives in areas ranging from crop surveillance to data storage to telemedicine.
Commercial space ventures are drawing record levels of funding (Investors Join Space Race with Record Funding, Financial Times. April 29, 2021) and the economics of space has changed rapidly. According to NASA, launch costs that had held steady over the 30-year period between 1970 and 2000 have fallen by a factor of seven because of the development of SpaceX’s Falcon 9 reusable rockets.
In many ways, this is very similar to the advances we’ve seen in other technologies since that first satellite launched in the 1950s. The combination of technological and manufacturing innovation reduces costs (think smartphones), fostering market growth.
Morgan Stanley estimates that the global space industry could generate revenue of more than $1 trillion or more in 2040, up from $350 billion, currently.
Personality: It’s easy to see why the space industry has the potential to grow rapidly. What are some areas where you see significant potential?
Procure: There are numerous industries and technologies that have caught our attention for both short term and longer term opportunities. Broadband internet and secure communications utilizing satellite networks are currently being developed and deployed around the globe to provide rapid and safe connectivity to users of all sorts. Connected devices/IoT, blockchain, big data, 5G and other data intensive technologies look to utilize satellites as a crucial facilitator in delivering data from point A to B.
Looking further out, space technology has the potential to revolutionize the energy (nuclear and solar technology), transportation (hypersonic vehicles), manufacturing (3D printing), natural resource (asteroid mining) and other important industries. Space has the potential to enhance life here on Earth as well as propel our species beyond the confines of planet Earth.
Personality: What would you say to people who may misunderstand the industry?
Procure: When some people think of space, they think of exploration, which is one small portion of the industry. Satellite technology is an important part of the space sector. Not to mention the space industry initiatives designed to protect planet Earth.
Personality: What are some examples of how the industry is participating in the fight against climate change?
Procure: To tackle the numerous challenges our planet faces from global warming, we must have the tools to monitor and measure change. Satellites are playing a critical role in the data collection process. Companies such as Maxar*, Airbus*, and Spire Global* are using satellites to track weather patterns and natural disasters, detect and quantify emissions, calculate sea and ice levels, observe droughts, and much more.
However, the space industry’s role in ensuring Earth’s safety does not simply end with observation. As global superpowers like China and Russia demonstrate satellite destroying capabilities and corporations look to ramp up space businesses via satellite launches, the need to protect Low Earth Orbit (LEO) is imperative. New investments in space debris monitoring, removal and mitigation will be essential to keep LEO safe and usable for decades to come.
Looking beyond LEO, researchers aim to protect Earth from asteroids and meteors. As a result, investments are increasing in the areas of detection and deterrence of these potentially destructive menaces. NASA recently launched its Double Asteroid Redirection Test mission to gauge our ability to redirect the course of an asteroid that could one day threaten life on Earth.
Personality: Why should investors consider the Procure Space ETF?
Procure: The Procure Space ETF (TICKER: UFO) includes space-based companies poised to participate in, and potentially capitalize on, improving our everyday lives and protecting Earth. UFO provides access to a diversified portfolio of 40+ global companies specializing in space-related industries. To learn more about UFO, the Procure Space ETF, visit www.ProcureETFs.com.
The Procure Space ETF (TICKER: UFO) includes space-based companies poised to participate in, and potentially capitalize on, improving our everyday lives and protecting Earth. UFO provides access to a diversified portfolio of 40+ global companies specializing in space-related industries. To learn more about UFO, the Procure Space ETF, visit www.ProcureETFs.com.*As February 3rd, 2022, Airbus (AIR FP) was a 1.09% holding, Maxar Technologies (MAXR) was a 4.75% holding, and Spire Global (SPIR) was a 1.10% holding in the Procure Space ETF (NASDAQ: UFO). For a complete list of holdings in UFO, visit https://procureetfs.com/ufo/. Fund holdings and sector allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security. Please consider the Funds investment objectives, risks, and charges and expenses carefully before you invest. This and other important information is contained in the Fund’s summary prospectus and prospectus, which can be obtained by visiting procureetfs.com. Read carefully before you invest.
Investing involves risk. Principal loss is possible. The Fund is also subject to the following risks: Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the funds. Brokerage commissions will reduce returns.
Aerospace and defense companies can be significantly affected by government aerospace and defense regulation and spending policies. The exploration of space by private industry and the harvesting of space assets is a business based in future and is witnessing new entrants into the market. Investments in the Fund will be riskier than traditional investments in established industry sectors. The Fund is considered to be concentrated in securities of companies that operate or utilize satellites which are subject to manufacturing delays, launch delays or failures, and operational and environmental risks that could limit their ability to utilize the satellites needed to deliver services to customers.
Investing in foreign securities are volatile, harder to price, and less liquid than U.S. securities. Securities of small- and mid-capitalization companies may experience much more price volatility, greater spreads between their bid and ask prices and significantly lower trading volumes than securities issued by large, more established companies. The Fund is not actively managed so it would not take defensive positions in declining markets unless such positions are reflected in the underlying index. Please refer to the summary prospectus for a more detailed explanation of the Funds’ principal risks. It is not possible to invest in an index. UFO is distributed by Quasar Distributors, LLC.