Space Innovation and a Return to the Moon Could Fuel "UFO" ETF

During a visit to the Kennedy Space Center in Florida, U.S. Treasury Secretary Steven Mnuchin threw his support behind space innovation, particularly its ability to spur job creation. It’s something that U.S. President Donald Trump’s administration is willing to back, especially after requesting an additional $1.6 billion for the National Aeronautics and Space Administration (NASA) to relaunch a program to return humans to the moon.

“I think it’s very important to Florida’s economy. It’s very important to the innovation. It brings a lot of jobs here, a lot of new technology, and I think one of the things you know under the Trump administration, we’re looking at space as not just traveling for the sake of traveling, but for the sake of technology and for the sake of understanding how all these resources can be used for the betterment of mankind,” Mnuchin said.

This is certainly something that can help fuel the Procure Space ETF (NYSEArca: UFO) to future gains. In an exchange-traded fund (ETF) landscape that has over 2,000 funds for investors to choose from, it’s important to have product differentiation in this quest for assets under management like UFO–the world’s first global ETF to give investors pure-play access to the expanding space industry.

The UFO ETF tracks the S-Network Space Index, which focuses on companies that are significantly engaged in space-related activities. Index constituents span multiple industries, including satellite-based consumer products and services, rocket and satellite manufacturing, space technology hardware, and space-based imagery and intelligence services.

Approximately 80 percent of companies in the index derive the majority of revenues directly from their involvement in the space industry, enabling investors to potentially capture this growing segment of the global economy. The Commerce Department is already throwing its support behind the American space industry with ambitious goals for regulatory reform and promotional efforts.

Outside of the government realm, private companies like Amazon are propping up their space exploration ventures with investment capital. Amazon CEO Jeff Bezos has an entire other company dedicated to space exploration as the online retailer has ambitious plans to set up a network of more than 3,000 satellites to expand high-speed internet access worldwide.

Tesla CEO Elon Musk’s other company, SpaceX, expects revenues from rocket launch services to hit $3 billion per year. This can help provide the capital necessary to fund Musk’s larger dream of developing new spacecraft capable of flying customers to the moon as well as feed other ambitions of colonizing Mars.

Meanwhile, efforts for NASA to return humans to the moon will cost a pretty penny and then some–how about an estimated $20 to $30 billion. Believe it or not, it’s actually less costly than anticipated, but that allocation of government funds will certainly be a cause for debate on Capitol Hill.

Nonetheless, Mnuchin says President Trump is willing to show NASA the money.

“He’s more than willing to put (in) some money,” Mnuchin said. “He and the Vice President (Mike Pence) really want to rebuild the importance of NASA, want to go back to the moon, want to go to Mars, and he’s really delivered a very critical vision for the next 20 years of what we should be doing in space.”

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