Newcomer ProcureAM explores uncharted territory with first space ETF

Apr 11th, 2019 | By | Category: Equities

New ETF issuer ProcureAM has debuted with the launch of the Procure Space ETF (UFO US) on NYSE Arca.

ProcureAM Space ETF

The fund is the first ETF to offer pure-play exposure to firms linked to the space industry.

The fund tracks the S-Network Space Index and is the world’s first ETF to provide pure-play exposure to companies linked to the space industry.

The index was created by smart beta and thematic index specialist S-Network Global Indices and developed in collaboration with space industry analyst Micah Walter-Range, former director of research and analysis for the non-profit Space Foundation.

The methodology selects developed market companies with business operations linked to space industries such as satellite-based consumer products and services, rocket and satellite manufacturing, space technology hardware, and space-based imagery and intelligence services.

To be eligible for inclusion, firms must derive a minimum of 20% of their total revenues, and at least $500 million annually, from space-related activities.

The index then sorts constituents into two tranches: “Non-diversified” companies that derive the majority of their revenues from space activities, and “Diversified” for the rest. The Non-diversified tranche accounts for 80% of the index’s total weight, while the Diversified tranche makes up the remaining 20%.

Constituents within each tranche are weighted according to the product of their float-adjusted market capitalization and the company’s space revenue percentage. Reconstitution occurs semi-annually, while rebalancing is done on a quarterly schedule.

Over two-thirds (69.1%) of the index exposure is allocated to stocks listed in the US with the next largest country exposures being France (12.4%), Japan (4.8%), and Australia (4.5%). The index is strongly tilted to the communication services sector with a weight of 59.1%, while the industrials (20.8%) and information technology (14.7%) sectors also play a significant role.

UFO is the first product launched by ProcureAM which has been founded by ETF entrepreneur Andrew Chanin – possibly best known as a founding participant of what is now the $1.6bn ETFMG Prime Cyber Security ETF (HACK US) – and industry veteran Robert “Bob” Tull.

“I am honored to bring UFO to market alongside Bob, a trusted mentor with one of the most respected names in the ETF industry,” said Andrew Chanin, co-Founder and CEO of ProcureAM. “Whether we realize it or not, the space industry touches virtually every aspect of our daily lives – from weather forecasts to GPS systems. The industry is already valued at $384 billion, and estimates project that number to eclipse $1.1 trillion by 2040. Through UFO, investors can now potentially capitalize on this increasingly significant and transformational industry.”

“The exploration of space and the utilization of space assets has become a worldwide effort as a growing number of corporate participants look to meet the future needs of a proliferating global population,” added Bob Tull, co-Founder and President of ProcureAM. “We firmly believe the next era of space exploration is upon us, and we believe we are uniquely positioned to help investors access this space like never before.”

The ETF comes with an expense ratio of 0.75%.

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