Outer space is the next frontier
At the end of last year with brilliant timing from the White House to coincide with Disney’s release of Star Wars: The Rise of Skywalker, the announcement was made that the U.S. had created its first new branch of the military in over 70 years; the U.S. Space Force.
This was not just a marketing stunt. The reality is that the race to dominate space has been on since the former Soviet Union’s Sputnik program in the late 1950s and now China’s space agency is racing to get a mission to Mars going by mid-2020.
Governments are not the only ones seeking success in outer space. Private enterprises such as Elon Musk’s SpaceX, Jeff Bezos’ Blue Origin, and Richard Branson’s Virgin Galactic, which debuted on the NYSE last year and is on a rocket ride of its own, are also wanting in on the action.
In today’s modern investing world a new investment trend wouldn’t count unless someone had created an exchange-traded fund for it. Sure enough under the extraterrestrial inspired ticker symbol (UFO), you can now buy the Procure Space ETF, which also owns Virgin Galactic, as well as several other companies focused on space-related technologies from satellite companies to familiar aerospace defense companies like Raytheon and Lockheed Martin. The fund has had a bumpy ride but is also finding lift off. Here’s a chart of the fund since it launched vs the S&P 500 ETF (SPY).
If you’ve been reading our material for awhile you know that we believe that global equities are already priced to Mars. That said everyone should be paying attention to companies with serious efforts to get to outer space. The risks will be high but so will the rewards.
And let’s not forget the biggest inspiration that helped start it all – Star Wars! Walt Disney, a man synonymous with imagination, would be pleased to know that his company now owns the Star Wars franchise. With box office sales that get bigger with each release shareholders are pleased too.