Over the past few years, many big technology companies have entered the space race, whether it was Amazon's (AMZN) Jeff Bezos with Blue Horizon, Tesla's (TSLA) Elon Musk with Space X, or Alphabet's (GOOG) satellite internet service, which will be competing with Space X Starlink internet service.
Now the newest technology company to enter space is Apple (AAPL), but in a slightly different way than the others.
On September 7th, Apple released its newest iPhone, the iPhone 14. One of the key features of this new device is the Emergency SOS via satellite feature. This feature allows iPhone 14 owners to contact emergency services via satellites in an emergency when the individual does not have traditional cellular telephone service.
This feature could be a game changer during natural disasters and cell towers are knocked out. Those in need of help will be able to contact first responders with their location, health status, and other pertinent information to help save lives.
Apple is subcontracting the satellite service with a company called Globalstar (GSAT) which already has a network of satellites in outer space for which Apple iPhone 14 and newer phones will be able to access.
The Emergency SOS satellite service will be free for the first two years of owning the iPhone 14; after that time, there will be a price associated with the service, but those details are unknown now.
With more and more of the major technology companies entering space in some form or fashion, it is not hard to see that aerospace technology and the companies currently operating in that industry will benefit from the shift.
That is why I believe you should consider investing a small portion of your portfolio in the aerospace industry. And one of the best ways to gain broad access to any sector is using exchange-traded funds. So, let us look at a few ETFs you can own today, which will give you access to the aerospace industry.
First is the largest and most well-known of the three I will highlight today, the ARK Space Exploration & Innovation ETF (ARKX). ARKX is one of Cathie Woods funds. ARKX focuses on global companies engaged in space exploration and innovation.
As described by the fund advisor, space exploration is leading, enabling, or benefiting from technologically enabled products and /or services that occur beyond the surface of Earth and the introduction of a technologically enabled product or service that the advisor expects to change an industry landscape.
The fund's scope seems broad, but ARKX only has 36 holdings with a weighted average market cap of $82 billion. The fund currently has $293 million in assets and charges an expense ratio of 0.75%. ARKX had an inception date of March 30th, 2021.
Next, we have the Procure Space ETF (UFO). UFO was the first global aerospace and defense fund, founded in April 2019. It focuses on companies that span several industries, including satellite-based consumer products and services, rocket and satellite manufacturing, deployment and maintenance, space technology hardware, ground equipment manufacturing, and space-based imagery and intelligence services.
UFO has 47 holdings with a weighted market cap of $25 billion and charges an expense ratio of 0.75%, the same as ARKX. UFO has $60.8 million in assets under management.
And finally, the SPDR S&P Kensho Final Frontiers ETF (ROKT). This ETF has been around since October 2018 but differs from UFO because it focuses more on US-based companies whose products and services drive the innovation behind exploring deep space and the deep sea.
ROKT has 36 holdings with a weighted market cap of $31 billion and an expense ratio of 0.45%, making it the cheapest of the three ETFs highlighted today.
Year-to-date, all three funds are in the red. ROKT is down 8.5%, while ARKX and UFO are down 27.75% and 25.2%, respectively. But, the whole market is off this year, so I wouldn't trust these ETFs to stay red over the long run.
Furthermore, as we have seen the progression of technology and outer space collide, with the most recent by Apple, I believe it is hard to deny that more and more companies will make a similar move. In the future, we will have more companies operating in the aerospace industry or the space industry providing them a service, such as internet or cell service. Obviously, that will drive the industry and make any investments you make today much more valuable in the future.
Matt Thalman
INO.com Contributor
Follow me on Twitter @mthalman5513
Disclosure: This contributor did not hold a position in any investment mentioned above at the time this blog post was published. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.
