Investors are always looking to the future, and when it comes to imagining the future, it’s hard to ignore space. Earth’s orbit represents a vast opportunity space, with an ever-growing number of satellites, for example, being launched into operation. The space ETF UFO offers a dedicated strategy that targets the companies looking to the final frontier, with some of its key stocks starring last month.
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UFO, the Procure Space ETF, launched in 2019. Charging a 75-basis-point (bps) fee, the fund tracks the S-Network Space index, which includes fewer than 50 stocks as of January 30th. The fund has performed well over the last month overall, returning 7.8% per ETF Database data. That outperformed the space ETF’s category average during that period, while its Global Equities category returned just 2.9% on average.
The index takes a tier-weighted index of global aerospace firms. In doing so, it casts a net across multiple industries, from satellites and rocketry to ground equipment manufacturing, repairs, and imaging. Furthermore, the index splits its investments into two main categories: non-diversified space firms deriving at least 50% of their revenue from space, and diversified firms generally engaged in space activities.
How, then, did that approach serve the space ETF and its investors in January? The fund’s top-weighted holdings contributed significantly to the ETF’s overall performance, driving strong returns. Three stocks in particular delivered robust returns of more than 30% in January. MDA Space Ltd. (MDA), AST SpaceMobile Inc. (ASTS), and ViaSat Inc. (VSAT) returned 46%, 53.1%, and 31.1%, respectively.
MDA, a Canadian space tech company, recently saw an upgraded outlook rating by Morgan Stanley. The company, Canada’s largest space firm, is responsible for the main robotic arm operating on the International Space Station. VSAT, a high-speed satellite networking company, also received an upgraded rating from Morgan Stanley. VSAT is also targeting a new satellite commercial service launch in the near term. ASTS also works on satellite networking services.
A bright future for space investing may see the fund and its stocks produce another strong month in February. For those investors looking at their space ETF options, UFO may be a rising star.
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VettaFi LLC (“VettaFi”) is the index provider for UFO, for which it receives an index licensing fee. However, UFO is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of UFO.