Space investing is a relatively new theme, but it is attracting some of the biggest names in business, including consulting giants Bain, BCG, McKinsey, and Deloitte. Deloitte has recently formed its space consulting division, which Brett Loubert leads. Loubert outlined two opportunities in space: space missions and space growth. The former represents clients that design and launch systems into orbit or have a dedicated business unit focused on space. The latter presents the more lucrative potential, according to CNBC.
The $280.7 million ARK Space Exploration & Innovation ETF (ARKX) is an actively managed ETF that can respond to emerging space trends and allocate to both opportunities mentioned by Loubert. The ETF typically holds 35 to 55 stocks and is expected to benefit long-term investors as the space economy is projected to be worth $1 trillion by 2040. Loubert considers that estimate conservative.
ARKX has the potential to invest in younger, publicly traded space companies nimbly while avoiding some of the trouble spots in the industry. For example, Virgin Orbit is trying to avoid collapse and has furloughed much of its staff.
Boeing is a dominant player in aerospace and defence but is perceived as lagging behind competitors in the space industry, such as SpaceX. Boeing has recently delayed its Starliner capsule’s launch, adding to a string of postponements, indicating that the company has work to do to make its space portfolio competitive. While Boeing is not a member of the ARKX portfolio, rivals Honeywell International and Lockheed Martin have pointed out that the ETF would not shy away from holding large-cap companies with a successful track record in domains other than space.
