Mars Attacks … Market!
There is a small but growing corner of the ETF world devoted to foreign investments. The latest entrant is Round Hill Investments, which launched its aerospace and technology ETF ( MARS ) last week. It is an actively managed fund that focuses on space-related technology, including GPS, weather forecasting and communications. Will it capture the hearts of many investors who have looked up at the night sky and wondered about the possibilities? More importantly, will it attract investors who haven’t thought of it?
“Whether we know it or not, we’re dealing with location-enabled technologies every day,” said Round Hill ETF strategist Thomas DeFazio. Most of the time, “we don’t really know anything.”
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Numerous aerospace and defense exchange-traded funds invest in aerospace technologies, but only a few are dedicated to a specific category. The largest is the $821 million ARK Space and Defense Innovation ETF (ARKX), followed by the $358 million Procure Space ETF (UFO). Another issuer, Vinik, filed in February for a future space ETF, which may be similar to its existing space innovator UCITS ETF, based in Ireland.
One reason to look for investments in companies that invest beyond the blue marble: $1.8 trillion. That’s the projected size of the global space economy by 2035, according to McKinsey and the World Economic Forum, DiFazio said. Maybe there is something to it. UFO is up 10% year-to-date and 90% higher in 12 months. While ARKX is up 4% so far this year, it has gained 68% in a year.
An overview of the Mars ETF:
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It mainly invests in telecommunications and industrials, which together make up about 89% of the portfolio.
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Its largest holdings are Rocket Labs (10%), AST SpaceMobile (10%) and EchoStar (9%).
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Absent from the portfolio is SpaceX, as the ETF only invests in publicly traded securities. If and when the company’s IPO happens, likely later this year, the investment committee may consider it, though it’s not a given that SpaceX will go to MARS.
space junk: Everyone remembers the 2013 sensation that was the movie gravitywhere debris in Earth’s orbit destroys a spaceship and sends Sandra Bullock’s character on a thrilling quest to survive? Well, there is a company (Astroscale) in the MARS Fund that is focused on avoiding just such a situation, by finding ways to clean up space debris. “It’s like space economy waste management,” DeFazio said. “It’s a real concern. Some of these (spacecraft) lose power or have problems and become unusable. Astroscale can step in and fix some of those problems.”
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