While the past two years were rocky for stocks linked to the emerging space exploration industry, some Wall Streeters still believe that it will payoff down the road — and funds are available for those who wish to invest now. Guy Russell and Irene Tunkel, from BCA Research, wrote to their clients in an August 28 note that the industry was still in its infancy. However it has a lot of potential. “We think it’s one of the biggest investment ideas. Once the theme matures, we will take an investment position. Russell and Tunkel cited falling launch costs and continued demand for satellites, as well as India’s recent lunar landing, to be reasons for optimism about the future of the space industry. The note also looked at three ETFs which provide exposure to a small group of stocks in the space industry. Cathy Wood’s Ark Space Exploration & Innovation ETF is the most successful fund, both in terms of total assets and this year’s performance. The fund has risen by more than 17% in the past year. The ARK fund uses a broad-based approach to find space stocks. Trimble, a company that provides advanced location-based technology using GPS, lasers, optical, and inertial systems, is its top holding. Ark has stocks like Alphabet, the parent company of Google, and Amazon that are only tangentially space-related, for now. BCA describes the Procure Space ETF as “the purest play in space exploration” for investors who are looking for a narrower approach. Top holdings of the fund include Luxembourg satellite company SES, and Rocket Lab. Ark and Procure are, of course, both below their 2021 highs. The SPDR S & P Kensho Final Frontier ETF ROKT has done better in that period, but is also the smallest of the three funds by assets and is not widely traded. The BCA note stated that the ETFs are volatile investments and are only suitable for investors who have a long-term investment horizon. CNBC’s Michael Bloom provided reporting.
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