Elon Musk has SpaceX, Jeff Bezos has Blue Origin and Richard Branson has Virgin Galactic. Is it time for you to invest in space too? While it is unlikely that you start your own space travel company, it is still possible to invest in the final frontier.
Blue Origin and SpaceX are privately held companies meaning there is not investment opportunity, that being said, those two companies are having a significant impact on the rest of the space sector by driving down costs (In the early 1980’s it cost $38,734 to send one pound into low earth orbit compared to $432 in 2020). There are still several “Space Industries” that can get you into the atmosphere of space investments. Those industries range from satellite systems to satellite-based telecommunications to intelligence services as well as space technology and hardware.
Certainly, you could choose to invest in individual stocks that find themselves in one of the space industries, but its makes more sense to use an ETF for more exposure. One ETF that could take you to the moon is the Procure Space ETF. This ETF tracks the S-Network Space Index closely and tries to replicate it. At least 80% of the index weight is allocated to companies that derive a majority of their revenues from the aforementioned industries.
North America has the highest market share in the spacecraft market, primarily given the influence and sizeable space budget for NASA, making it a plausible investment option. In March 2018, NASA was given a grant of $20.74 billion by the U.S. Government and odds are North America will remain a formidable player in the race to the $1.5 trillion commercial space market forecasted by 2040.
Other forecasts from Goldman Sachs and Bank of American suggest the commercial space market will reach $1 trillion and $3 trillion, respectively, by 2040. And with NASA increasingly relying on private companies for services, it means good things for space-focused companies and their suppliers. If you read the news, you’ve no doubt seen the incredible prices people are paying to travel to space (roughly $55 million per seat). While it’s unlikely that I will make my voyage anytime soon, maybe I can take my portfolio out of this world.