Proposed Space ETF A First

May 23, 2018

A new issuer headed by some names already well-known in the ETF industry has filed for a pair of ETFs targeting unique areas. ProcureAM, founded by Bob Tull and Andrew Chanin, has filed for what would be the first ETF to specifically target the space industry and another that would focus on companies that combat global warming, including those that do so through the production and use of alternative energy, according to the prospectus.

Where No ETF Has Gone Before?

The Procure Space ETF (UFO) will track the S-Network Space Index, which covers companies that generate the majority of their revenues from business activities in space-related industries. Companies can be involved in telecommunications or broadcasting; the operation and manufacturing of rockets and satellites, as well as the equipment and systems that support them; space technology and hardware, and related imagery and intelligence services, the document says.

Companies are selected from a global universe that includes the full market-capitalization spectrum; however, the prospectus notes that the index generally has a weighting of about 60% of the index. Individual companies must meet liquidity and size minimum thresholds, and the index must include at least 22 components. It uses a modified market-capitalization approach to weights, with some adjustment made to account for how much space-related activities represent of total revenues. It is rebalanced quarterly and reconstituted twice a year.

The index currently includes 31 components, with Australian company SpeedCast International topping the company weights at 5.52%, followed by Sirius XM Holdings at 5.14% and Iridium Communications at 5.05%. After the U.S., France is the largest country in the index, with a weight of 14.81%.

Interestingly, the prospectus says it will add new segments as they develop, anticipating the inclusion of those related to space colonization, resource extraction, tourism, defense and other technologies.

While there are a handful of aerospace and defense ETFs currently trading, none focuses exclusively on space-related activities.

UFO will come with an expense ratio of 0.75%.

Global Warming’s Adversaries

The Procure Advanced Global Warming ETF will track an index that covers companies that support the mitigation of global warming; are involved in the production and usage of alternative energy; and have a proven record of educating the global community about climate change and its consequences. The index will cap individual companies at 10% of the index and undergo rebalancing on a quarterly basis.

Like UFO, the global warming ETF is slated to have an expense ratio of 0.75%.

Contact Heather Bell at [email protected]

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