NASA Is the Hottest New Space ETF
The Tema-run fund has pulled in $367 million since March 31 and is outperforming its peers by double digits.
Back in March I covered the launch of the Roundhill Space & Technology ETF (MARS), which at the time made it just the fourth space-themed fund on the market, alongside the ARK Space & Defense Innovation ETF (ARKX), the Procure Space ETF (UFO), and the SPDR S&P Kensho Final Frontiers ETF (ROKT).
In the two months since, six more have come to market:
-Tema Space Innovators ETF (NASA)
-Global X Space Tech ETF (ORBX)
-Tuttle Capital Space Industry Income Blast ETF (SPCI)
-Corgi Space & Satellite Communications ETF (DIPR)
-VanEck Space ETF (WARP)
-Defiance Pure Space Daily 2X Strategy ETF (SPCL)
Collectively, the ten funds now hold $2.4 billion in assets, helped along by $1.4 billion of inflows year to date and a strong run for space stocks generally.
The three oldest funds have absorbed most of that new money. UFO has pulled in $520 million this year, the most of any space ETF. ARKX is third with $312 million, and ROKT fourth with $111 million. MARS, the fund I covered earlier this spring, has gathered $26 million.
The Breakout Fund
But the standout of the bunch is NASA, which has hauled in $367 million since its March 31 debut. Combined with price appreciation, that's left it at $406 million in total assets in just over six weeks, putting it ahead of every space ETF except the two largest.
So what’s driving the interest in this fund? It’s hard to say for sure, but one likely explanation is that NASA is the only space-themed ETF that holds SpaceX.
The fund currently has roughly 10.3% in SpaceX through a special purpose vehicle, just behind its top holding, Rocket Lab, at 10.5%.
Otherwise the prospectus describes a fairly standard actively managed space ETF, with an aim to invest in companies generating half their revenue or more from "space-related" activities.
Outside of SpaceX, the holdings look a lot like other space funds, with Planet Labs, Intuitive Machines, Firefly Aerospace, and so on in the portfolio.
The expense ratio is 0.87%, the third-highest in the group and the highest among the non-derivative products.
Strong Performance
SpaceX is an obvious draw for the ETF, but NASA's performance has been strong too. Since inception, the fund is up 37%, well ahead of UFO at 26%, ROKT at 20%, and ARKX at 19% over the same stretch.
NASA launched at the end of March, just after SpaceX announced its tie-up with xAI at a combined $1.25 trillion valuation, and as headlines started reporting that the company could be targeting a $2 trillion valuation in its IPO later this year.
Tema notes that NASA's SPV stake is carried at transaction cost rather than marked daily, so the position value only moves when the fund actually buys or sells. As of May 13, NASA holds 82,385 share-equivalents valued at roughly $53.6 million, which implies a SpaceX market cap of about $1.54 trillion.
What's Fueling the Returns
The SpaceX holding, mark-to-cost as it is, isn't really the engine of outperformance. The bigger contributors are elsewhere. Filtronic, NASA's fourth-largest holding and a UK-listed name, has climbed 118% since the end of March. None of the other space ETFs own it, and it alone has added about five percentage points to NASA's return.
The fund has also benefited from sizing up the right stocks. Rocket Lab is the top holding and has contributed roughly 650 basis points to performance this year; NASA holds 10.5% of its portfolio in the stock versus 6.7% for UFO. Intuitive Machines is a similar story, adding about 345 basis points to the ETF’s return, with a weighting of 6% versus around 4% in UFO.
So the irony is that while SpaceX might be what’s pulling investors into the ETF, the actual outperformance is coming from concentrated bets in publicly traded space names that have run hard.
That said, NASA isn't the best performing space ETF since its launch. MARS is ahead with a 40% gain in the same time period, despite gathering just $26 million in inflows versus NASA's $367 million. SPCI is technically ahead too at 46%, but its options overlay strategy puts it in a different category than the rest of the space ETF lineup.
The fact that MARS has done better than NASA over the same window despite no SpaceX exposure, while gathering a small fraction of the inflows, is the clearest signal that SpaceX exposure is what's pulling money into NASA.
