First Trust Launches First Trust Bloomberg Space Economy ETF
An index-tracking thematic ETF that provides exposure to companies within the space economy
Space has quietly become one of the most consequential infrastructure layers of the modern world. What was once the domain of a small number of national space programs has grown into a commercial and government ecosystem that forms the invisible backbone of global navigation, weather forecasting, financial transactions, military communications, and broadband connectivity for populations far beyond the reach of traditional networks.
"As the space economy matures into a dynamic commercial marketplace, investors need benchmarks built on credible, data-driven methodologies," said Mike Pruzinsky, Equity Index Product Manager at Bloomberg Index Services Limited. "The Bloomberg Space Economy Index delivers exactly that, combining sector knowledge with index construction designed to reflect how this industry actually operates. We are pleased that First Trust has selected the Bloomberg Space Economy Index for its investable product.”
The index is designed to track the performance of companies with exposure to the space economy across four categories as defined by Bloomberg Intelligence (“BI”): Space Domain Awareness, Launch and Space Transportation, Satellites and Communications, and Space Data & Artificial Intelligence. The index selects up to 50 companies based on revenue exposure and market capitalization and is rebalanced and reconstituted quarterly.
“The burgeoning space economy offers intriguing potential, in our view, but as with many other rapidly evolving industries, future winners and losers are still unknown,” said Ryan Issakainen, CFA, Senior Vice President and ETF Strategist at First Trust. “We believe FSPC offers investors a compelling way to gain exposure to different facets of the space economy, supported by the insights and analysis of Bloomberg Intelligence.”
For more information about First Trust, please contact Ryan Issakainen at (630) 765-8689 or RIssakainen@FTAdvisors.com.
About First Trust
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The companies involved in the aerospace and defense industries are subject to fierce competition, consolidation, adverse political and government developments, substantial research and development costs, limited numbers of potential customers and excess capacity and spending trends. Their products and services may be subject to rapid obsolescence.
Artificial intelligence companies tend to be more volatile and they may have limited product lines, markets, financial resources or personnel and are subject to the risks of changes in business cycles, world economic growth, technological progress, costs of research and development, and government regulation. These companies are also heavily dependent on intellectual property rights, and challenges to or misappropriation of such rights could have a material adverse effect on such companies. Additionally, artificial intelligence technology could face increased regulatory scrutiny in the future, which may limit the development of this technology and impede the growth of companies that develop and/or utilize artificial intelligence.
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Information technology companies are subject to certain risks, including rapidly changing technologies, short product life cycles, fierce competition, aggressive pricing and reduced profit margins, loss of patent, copyright and trademark protections, cyclical market patterns, evolving industry standards and regulation and frequent new product introductions.
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Companies involved in the creation and utilization of space-related technologies face risks related to emerging technologies, evolving market demand, increased competition, and reliance on continued technological advancement. In addition, these companies may be affected by supply chain disruptions, cybersecurity incidents, regulatory changes, government spending and contracting policies, geopolitical events, labor shortages, and equipment obsolescence. As a result, investments in a fund focused on space economy companies may be more volatile and subject to greater risk than investments in more established industries.
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Ryan Issakainen
First Trust
(630) 765-8689
RIssakainen@FTAdvisors.com
Source: First Trust Advisors L.P.