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Space ETFs: Invest in the Final Frontier

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  • (1:30) - What Was The Reasoning Behind Procure Space ETF: UFO
  • (4:30) - What is the Current Growth Potential?
  • (7:15) - Can We Expect Space Tourism and Mining?
  • (10:50) - Stock Selection and Weighting For Procure Space ETF: UFO
  • (16:10) - How Does UFO Stand Out From Other Space and Defense ETFs?
  • (23:00) - Episode Roundup: Podcast@Zacks.com

In this episode of ETF Spotlight, I talk with Andrew Chanin, Bob Tull, and Micah Walter-Range. We discuss the space economy and the Procure Space ETF (UFO - Free Report) . Andrew and Bob are co-founders of ProcureAM, UFO’s issuer, and Micah is a global space economy expert and former director of research at the Space Foundation, who developed the index that UFO tracks.

According to Morgan Stanley, the global space industry could generate revenue of $1.1 trillion or more in 2040, up from ~$350 billion in 2018. Bank of America estimates the space economy to grow to $3 trillion by that time. UFO provides a convenient way to invest in the fast growing space industry.

The industry is also evolving rapidly. Elon Musk’s SpaceX, Richard Branson’s Virgin Galactic and Jeff Bezos’ Blue Origin are planning to send tourists into space in the next few years. Musk also plans to colonize Mars.

A Japanese start-up ALE is developing a shooting star creation technology and plans to offer meteors on demand. Noted astrophysicist Neil deGrasse Tyson says that space mining will produce world's first trillionaire.

Will space tourism, mars colonization and asteroid mining become real things in the next few years?

While billionaire investors like Bezos, Musk and Branson are investing a lot in the space economy, their companies are not publicly traded. However, there are many other innovative companies in the space related industries. UFO focuses mainly on pure-play space companies as at least 80% of its constituents derive a majority of revenues from space related businesses.

We discuss how stocks are selected and weighted in the index. Top holdings include Inmarsat (IMASY - Free Report) , Iridium Communications (IRDM - Free Report) , Viasat (VSAT - Free Report) , Dish Network (DISH - Free Report) and Garmin (GRMN - Free Report) . Micah points out that some of the high-profile private companies have partnered with public companies in the space and investors could benefit from those partnerships.

UFO is not the only space ETF available to investors. State Street’s SPDR Kensho Final Frontiers ETF (XKFF - Free Report) that made its debut last year, focuses on the exploration of both space and the deep sea. How is UFO different from XKFF and other Aerospace & Defense ETFs, like ITA)?

What else do investors need to know about investing in space? Find out on the podcast.

To learn more about UFO, please visit https://www.procureetfs.com/. Make sure to be on the lookout for the next edition of ETF Spotlight! If you have any comments or questions, please email podcast@zacks.com

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