By Robert Ross<\/p>\n
Im sure all of you have heard of ARK Invest founder, CEO, and CIO Catherine Wood.<\/p>\n
She is a crowd favorite at Mauldin Economics annual Strategic Investment Conference. (Mark your calendar for May 514, 2021, and stay tuned to your email for details about this years virtual event.)<\/p>\n
Catherine is also one of the worlds greatest investors. Her flagship fund, theARK Innovation ETF (ARKK), was the best-performing actively managed ETF in the world last year.<\/p>\n
Two things make this fund unique<\/p>\n<\/p>\n
First, you wont find many actively run ETFs like this in the market, especially one with a triple-digit gain like the 148% ARKK returned in 2020.<\/p>\n
Second, youre not going to find the same kind of staid, safe stocks that anchor traditional investorsand a lot of fund managersportfolios.<\/p>\n
Catherine focuses her research on companies that are disruptive. This includes companies that are making a name for themselves with electric vehicles, digital payments, and genetic sequencing.<\/p>\n<\/p>\n
With such strong performance, its no surprise her assets under management grew tenfold to become the largest active ETF in the worldjust six years after she launched it.<\/p>\n
ARKK is already up 18% in 2021. And withtechnology set to be 2021s top-performing sector, theres likely a lot more upside in store.<\/p>\n
But if you want real moonshot potential, well, theres about to be an ETF for that, too.<\/p>\n
This month, ARK Invest filed paperwork for a new space exploration fund.<\/p>\n
TheARK Space Exploration ETF (Pending: ARKX)will hold companies at the forefront of one of the fastest-growing industries on the planet.<\/p>\n
A lot has changed in the half-century since Neil Armstrong first stepped on the moon.<\/p>\n
The government is still in the game, but the private sector is breaking into the space race in a big way.<\/p>\n
A massive $415 billion was spent on the space industry just in 2019. Thats up 79% since 2009:<\/p>\n<\/p>\n
Some 80% of this spending came from private industry. That is, the companies that build everything from satellite systems to deep-space rocket technology to specialty suits designed for astronauts in flight.<\/p>\n
This growth has been explosive, and it shows no signs of slowing down.<\/p>\n
Morgan Stanley expects the global space industry to generate over $1 trillion in revenues by 2040.<\/p>\n<\/p>\n
Thats up from $350 billion today.<\/p>\n
A large chunk of this growth will come from US military spending.<\/p>\n
Military spending is expected to reach $738 billion next year. Thats 20% of theentirefederal budget.<\/p>\n
Not even the current coronavirus recession should cause the US government to scale back on defense spending. It has actuallygrownduring the last six recessions:<\/p>\n<\/p>\n
And while broader defense spending looks to be rising steadily<\/p>\n
The Trump administration was one of the most pro-space administrations in modern history.<\/p>\n
It established a new, uniformed branch of the military known as Space Force. And it earmarked $23 billion for space-related projects in the current budget.<\/p>\n
That was up 63% from the previous year:<\/p>\n<\/p>\n
And because 100% of this money will be spent on US companies, owning space-related stocks and ETFs is the ultimate way to buy American.<\/p>\n
One segment of the space market that benefits heavily from US government spending is the satellite industry.<\/p>\n
According to the Satellite Industry Association, satellite manufacturing is a $20 billion marketplace on its own. Its dominated by large aerospace conglomerates likeBoeing (BA):<\/p>\n<\/p>\n
Boeing is an obvious beneficiary. Yet it only generates a small part of its sales from space technology.<\/p>\n
There are better ways to profit from the new space race<\/p>\n
In addition to satellite manufacturers, you also have companies that operate and service these satellites once theyve gone into space.<\/p>\n
One such company isIridium Communications (IRDM).<\/p>\n
Iridium is responsible for 66 satellites used for worldwide voice and data communication. It provides critical services for pagers, satellite phones, and air traffic control systems.<\/p>\n
These are mission-critical systems that need real-time access 24\/7. The US government is a reliable client; so are other governments, businesses, and individuals around the globe.<\/p>\n
IRDM doesnt pay a dividend. But there are plenty of companies in this stock universe that do<\/p>\n
Most pure-play space stocks are small, fast-growing companies. That means they just dont have extra cash left over each quarter to reward their investors.<\/p>\n
However, Ive found a duo of dividend payers that benefit directly from space technology<\/p>\n
The first is the worlds largest telecom company,AT&T (T).<\/p>\n
AT&T is ingrained in the space industry. It is even working with NASA to improve the Deep Space Network, which supports communications during interplanetary space missions.<\/p>\n
When it comes to dividend payers, its hard to top AT&T. The company is a Dividend Aristocrat, meaning it has increased its dividend for more than 25 years in a row. In AT&Ts case, it has raised its payout for 35 years in a row.<\/p>\n
Then theresGarmin (GRMN), which you might remember for its bulky GPS consoles.<\/p>\n
That was lightyears ago. Since then, the company has picked up significant exposure to the space industry. Last year, 20% of its sales were from aerospace.<\/p>\n
And with a 2.7% dividend yield, the company is a solid dividend option for income investors.<\/p>\n
But its not my top option. MyYield Sharksubscribers know theres one aerospace and defense company that rises above the rest. With a dividend yield thats twice that of the 10-year Treasury bill, its a great option for any income investors portfolio.Click here to unlock this stocktoday.<\/p>\n
Originally published by Mauldin Economics, 1\/27\/21<\/p>\n
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Original post:<\/p>\n
These Space Stocks Are Going to the Moon - ETF Trends<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" By Robert Ross Im sure all of you have heard of ARK Invest founder, CEO, and CIO Catherine Wood. She is a crowd favorite at Mauldin Economics annual Strategic Investment Conference Continue reading