Three Key Trends Fuelling the Commercial Space Industry
Space is no longer just an opportunity for deep-pocketed governments and billionaires.
The sector is now accessible to a wide range of entrepreneurs and
companies looking to cash in on its growth potential.
By Robert Tull, Co-founder of the Procure Space UCITS ETF
The commercialisation of space, whether it’s launching satellites to help meet the growing demands for data transfer or to support GPS systems and weather forecasts shows how the space economy is a part of people’s everyday lives and not just about space exploration.
Here, we examine three key trends driving the commercial space industry this year and beyond.
Lowered barriers of entry:
Private companies have historically encountered barriers to entering the space market due to high costs. However, advances in electronics have enabled companies to cost-effectively manufacture satellites that are more compact and powerful. Additionally, the advent of reusable rockets has significantly decreased launch costs. SpaceX’s Crew-1 mission in May 2020, for example, lowered human launch costs from ~$81 million per seat to ~$55 million, a ~32 % decrease. These reduced equipment expenses will free up company budgets, allowing them to allocate more resources toward space-related initiatives.
Elevated reliance on satellite infrastructure:
Whether we see them or not, satellites play a critical role for governments, companies and individuals alike. Emerging technologies like 5G, broadband internet, blockchain, cloud computing and others have captured investor interest around the globe.
However, many fail to realize these technologies are entirely reliant on space-based systems. Satellite systems and technologies are a major growth market as the growth of Uber, Deliveroo and others demonstrate. GPS is central to their success just as satellites are vital for providing higher bandwidth and coverage in broadband and telecoms.
The COVID-19 pandemic has only accelerated the world’s dependence on satellite infrastructure amid widespread remote work and digital adoption.
Increased competition for international space dominance:
Space defense is becoming a must-spend area among global superpowers, which may have a profound effect on the commercial space industry as governments primarily rely on private companies to develop defense infrastructure and technology.
In 2019, the United States Space Force (USSF) was created as a new branch of the U.S. Armed Forces. China has ambitious goals to establish a moon colony by 2028 and potentially a moon military base by 2030. Russia is also putting significant resources toward space militarization and defense. As more nations augment their space military capabilities, it’s likely others will stake their claim in the second “Space Race” as well.
Investors looking to get a slice of the commercial space industry can consider the Nasdaq-listed Procure Space ETF (UFO), which invests in 30+ publicly traded, space-related companies from around the globe.
Investing in Space
Investors looking to get a slice of themes such as the commercial space industry can consider exchange traded funds (ETFs). ETFs enable investors to invest in a broad basket of securities that represent companies from a specific sector or theme such as cloud computing or the space economy.
More information about Procure Space UCITS ETF here >
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The Prospectus can all be downloaded from www.hanetf.com.
The decision and amount to invest in any ETF should take into consideration your specific circumstances after seeking independent investment, tax and legal advice.
Important Information:
Communications issued in the European Economic Area (“EEA”)
The content in this document is issued by HANetf Management Limited (“HML”) acting in its capacity as management company of HANetf ICAV. HML is authorised and regulated by the Central Bank of Ireland. HML is registered in Ireland with registration number 621172.
Communications issued in the UK
The content in this document is issued by HANetf Limited (“HANetf”), an appointed representative of Mirabella Advisers LLP, which is authorised and regulated by the Financial Conduct Authority (FCA FRN 606792). HANetf is registered in England and Wales with registration number 10697042.
This communication has been prepared for professional investors, but the Exchange Traded Funds (“ETFs”) set out in this communication may be available in some jurisdictions to any investors. Please check with your broker or intermediary that the relevant ETF is available in your jurisdiction and suitable for your investment profile.
Past performance is not a reliable indicator of future performance. The price of the ETFs may vary and they do not offer a fixed income.
This document may contain forward looking statements including statements regarding our belief or current expectations with regards to the performance of certain assets classes. Forward looking statements are subject to certain risks, uncertainties and assumptions. There can be no assurance that such statements will be accurate and actual results could differ materially from those anticipated in such statements. Therefore, readers are cautioned not to place undue reliance on these forward-looking statements.
The content of this document does not constitute an investment advice nor an offer for sale nor a solicitation of an offer to buy any product or make any investment. An investment in an exchange traded product is dependent on the performance of the underlying asset class, less costs, but it is not expected to track that performance exactly. The ETFs involve numerous risks including among others, general market risks relating to underlying adverse price movements in an Index or underlying asset class and currency, liquidity, operational, legal and regulatory risks.
The information contained on this document is not, and under no circumstances is to be construed as, an advertisement or any other step in furtherance of a public offering of securities in the United States or any province or territory thereof, where HANetf ICAV or their ETFs are authorised or registered for distribution and where no prospectus of HANetf ICAV has been filed with any securities commission or regulatory authority. No document or information on this document should be taken, transmitted or distributed (directly or indirectly) into the United States. HANetf ICAV, nor any securities issued by it, have been or will be registered under the United States Securities Act of 1933 or the Investment Company Act of 1940 or qualified under any applicable state securities statutes.
HANetf ICAV is an open-ended Irish collective asset management vehicle issuing under the terms in the Prospectus and relevant Supplement approved by the Central Bank of Ireland (“CBI”) (“Prospectus”) is the issuer of the ETFs. Investors should read the current version of the Prospectus before investing and should refer to the section of the Prospectus entitled ‘Risk Factors’ for further details of risks associated with an investment in the ETFs. Any decision to invest should be based on the information contained in the Prospectus.
The Prospectus can all be downloaded from www.hanetf.com.
The decision and amount to invest in any ETF should take into consideration your specific circumstances after seeking independent investment, tax and legal advice.
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