ETF Stream’s Product Panel has weighed in on the first space ETF set to launch in Europe which could struggle to find a fully investable universe but will benefit from being the first mover in the space.
Earlier this week, Procure announced it will list the Procure Space UCITS ETF (YODA) on the London Stock Exchange via white-label platform HANetf.
YODA tracks the S-Network Space index which offers exposure to over 30 space industry companies.
The ETF is a mirror strategy of the US-listed Procure Space ETF (UFO) which was launched in November 2019.
Kenneth Lamont (pictured centre), senior analyst, manager research, passive strategies, at Morningstar
The Procure Space UCITS ETF (YODA) is set to be a carbon copy of its US-listed cousin the Procure Space ETF (UFO).
While this is the first ETF to track a space theme in Europe, there are already five such ETFs listed in the US or Canada with a combined $785m assets under management (AUM).
US stocks make-up over two-thirds of fund holdings. On a sector level, exposure is spread largely across communication services, industrials and information technology.
Those sensitive to ESG concerns should take note that the fund has a 20% exposure to companies engaged in military contracting and 15% exposure to those involved in the manufacture or sale of controversial weapons.
Fabrizio Zumbo (pictured right), associate director, European asset and wealth management research at Cerulli
The pace of innovation in the European ETFs segment has been impressive in the last two years, with smaller players unveiling niche and highly specialised thematic strategies.
Although the competition in this space has been mounting, the appetite for such products is growing fast among European investors. Our research shows that 38% of the ETF issuers surveyed in Europe believe thematic ETFs will experience a significant level of demand over the next 12 to 24 months.
Several asset managers mentioned that investors’ appetite for thematic products is unlikely to dissipate in the near future, as they are becoming more comfortable with using thematic ETFs for diversification and to express their investment objectives.
The launch of YODA gives European investors access to another sector, which is expected to play an important role in telecommunications. Satellite systems and technologies play a critical role in supporting the development of the IoT sector and they are becoming ubiquitous in our daily life.
Athanasios Psarofagis (pictured left), ETF analyst, Bloomberg Intelligence
I have been impressed with HANetf recently. The firm is coming to market with a bunch of firsts.
The partnership with Procure makes a lot of sense. While Cathie Wood’s Ark Invest ETFs get the most attention, Procure was first to market and have a good grasp on the space (no pun intended).
I think these space ETFs might be a little early, meaning there might not be enough pure play names just yet but being a first mover is usually a big advantage.