FACTOR INVESTING – THURSDAY JULY 14, 2022 (08:15-11:30) – THE BERKELEY, LONDON Please join us for our annual Factor Investing Breakfast Briefing featuring MSCI, FlexShares ETFs, Tabula and Professor Stefan Zohren, Deputy Director of the Oxford-Man Institute of Quantitative Finance. Please register now if you wish to attend.
VanEck launched a new thematic equity ETF in Europe providing pure-play exposure to companies operating in the global space industry.
The VanEck Space Innovators UCITS ETF was listed on London Stock Exchange in US dollars (LN JEDI) and the British pound (JEDG LN) as well as on top Deutsche Borse Xetra in euros (JEDI GY).
According to research from Morgan Stanley, the commercial space sector is expected to grow from its current level of around $350 billion to a trillion dollar industry by 2040.
This rapid growth is due in part to falling costs due to the emergence of new technologies such as reusable rockets and next-generation small satellites.
At the same time, on the demand side, the introduction of 5G broadband and the development of the metaverse will require greater data capacity to be provided by satellite internet services.
Satellites are also expected to play a greater role in the global fight against climate change, as they have become an indispensable part of researching and monitoring greenhouse gas emissions as well as the state of the oceans, global temperatures and sea levels.
And while space tourism is still in its infancy, many would-be passengers have already posted multimillion-dollar flight bonds, underscoring the enormous potential of this fledgling industry.
Commenting on the outlook for the space industry, Martijn Rozemuller, CEO of VanEck Europe, said: “A new space era has begun. In recent years, space technologies have made great progress and the cost of launching rockets and satellites has dropped significantly. As a result, space has become much easier and cheaper to reach, opening up entirely new areas of activity.
“While rockets and satellites were developed and launched primarily by governments, various commercial companies are now engaged in building and operating these technologies. At the same time, space is beginning to return to the order of the governments – but they are increasingly relying on the services of private companies in this new commercial space age.
The fund is linked to MVIS Global Space Industry ESG Index which selects its constituents from a universe of developed and emerging market equities with market capitalizations greater than $150 million and average daily trading volumes greater than $1 million.
The index first screens out violators of UN Global Compact principles, companies involved in controversial weapons, and companies that derive at least 5% of their revenue from thermal coal, fossil fuels, tar sands, nuclear energy, civilian firearms and tobacco.
The methodology selects companies that generate at least 50% of their revenues, or have the potential to generate at least 50% of their revenues, in the following space-related business sectors: Space exploration (commercial spacecraft, tourism space, scientific research and cargo delivery in space); Rockets and propulsion systems (space vehicle systems and equipment, space payload, and materials and equipment used to construct spacecraft); satellite communications (satellite communication systems and software); and satellite equipment (systems and software for areas such as research, Earth observation, space imagery and GPS).
The constituents of the index are weighted by market capitalization subject to an individual safety cap of 8%.
The ETF comes with an expense ratio of 0.55%.
The fund is the second thematic ETF in Europe to target the space industry following the launch in June 2021 of the Get Space UCITS ETF (YODA LN). YODA follows the S-Network Space Indexcurrently houses $15 million in assets and has an expense ratio of 0.75%.