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Andrew Chanin; Topics: Commercial space investing summary for 2021, 2022 investing predictions, China and U.S. space policy, the China space race, Exchange Traded Funds, U.S. Policy, space sector economic concerns, surge in space sector public companies and more.
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We welcomed back Andrew Chanin of ProcureAM and the UFO ETF as we wanted a financial and investment summary for commercial space 2021 plus a look ahead at what to expect for the same sector for 2022. We started our discussion with the basics on ETFs, why diversification as opposed to buying solo stocks, the S-Network Space Index, plus the surge with entrepreneurial and young space sector companies going public via SPACS or other methods. This discussion, including the look ahead to next year, covered, a good portion of the first half of the program. For an idea of the topics covered, I refer you the tags and key words as I have done before. For your convenience they are repeated below.
Tags and Key Word.: Andrew Chanin, UFO ETF, ProcureAM, SPAC, market size, commercial space, long term EFT view, diversification, geopolitics, China, Russia, Russian ASAT test, company management, space weapons and UFO investment, S-Network Space Index, passive index, venture capital companies, rebalancing the index, reconstituting the index, capital, commercial space public investment surge, regulatory concerns, space billionaires, fees and taxes, Rwanda satellite constellation, economics with inflation and rising interest rates, space manufacturing, China's hypersonic glide weapon, China space race, investment appetite in commercial space sector, space as a pure play investment, China lunar base plans, China's lunar military base plans, U.S. Space Force, Seeking Alpha negative article on Space Sector ETF's.
As always, there are parts of these discussions that stand out and our program with Andrew was no exception. For example, we spent considerable time on policy that was focused on China, their "new" commercial and state space activities and why it was and still is so important for the US to do whatever it will take to remain in the lead. This was an important and common theme during our program. While I agreed with Andrew on concerns with China and the need to maintain the US leadership in space, I did ask why that was so important given my awareness that some in our audience and lots in the country do not believe this type of competition to be necessary. Be sure you listen to how Andrew responded to my question. Please post your opinion on this important issue through posting on our blog for this show.
Commercial space market risk for 2022 was talked about so Andrew was asked how he saw market conditions for new year. I asked if the surge in companies wanting to go public would continue or if we might see the commercial and entrepreneurial sector getting over heated. Again, you won't want to miss Andrew's commentary on these questions. In the midst of these questions, Marshall called wanting to know if the Index was a weighted index. Andrew said he was working with a Modified Cap Fund, then he explained this to us all while talking about index weighting. Marshall and Andrew talked about UFO being a pure-play ETF. He also explained what he meant by pure-play ETF. Marshall asked Andrew about SpaceX being part of UFO. Our guest explained that companies in the ETF must be publicly traded, even if in another country. Since SpaceX is still private, it cannot be included in an ETF but again, listen to all of what Andrew had to say about SpaceX, public and private space companies. Marshall then asked about venture capital companies and an ETF.
Listeners along with myself asked Andrew about the impact on UFO of rising inflation and the probability of rising interest rates. Andrew had much to say in response to of these questions so listen carefully to what he said would be the impact of those two economic conditions should they persist. Risk was an important discussion topic with this program, both for investors and the index so don't miss the risk commentary offered up by our guest. As we moved toward the end of our interview, I asked Andrew about a new article that appeared from the Seeking Alfa group regarding space ETF's. The article was titled "We Can't Get Excited About Space Sector ETFS." I read him the first few lines of the article which explained the headline. Listen to what I read on the air. If you want to read the article, you can find it here: https://seekingalpha.com/article/4476310-arkx-and-ufo-we-cant-get-excited-about-space-sector-etfs. Andrew said he was only familiar with it on a preliminary basis but that he had not read all of it or studied it. That said, based on the parts of the article that I read, we did discuss it to a small degree. Andrew did not agree with the article plus he was and is a big supporter of diversity so when one buys into an ETF, the investor has not put all the eggs in one basket so to speak of. Since the authors of the article clearly stated "we believe an individual stock-picking remains a preferable approach" you decide. Listen to Andrew describe investment diversification, risk and the young companies comprising part of the UFO EFT. Post your thoughts on this on our blog.
During the program we talked more about the space race with China and the need for the U.S. to ramp up industry spending, UFO history, the latest in their fund's companies plus the growing interest in space SPACs and other means for companies to become publicly traded. At one point Andrew mentioned a few pros and cons of going public compared to remaining private. You won't want to miss that discussion.
Please post your questions/comments for Andrew on our blog. You can reach our guest through me or ProcureAM.