Market Musings 130925: Is Space the Final Frontier?
Podcast this week:
Our Investment Strategy for September 2025 (click on link to open)
3 Key Themes with strong momentum:
Defence, Electric infrastructure, Batteries
European defence remains squarely in the news, on the back of a) Ukraine and b) pressure on NATO members from President Trump.
Key leaders in this subsector (which is relatively small) include Airbus (as much for Aerospace as for Defence) and Rolls Royce (buoyed notably by the continued excitement over Small Modular Reactors in nuclear power).
European Defence about to break out to new highs
The indirect play on AI-related datacentre expansion is the need to invest in greater electricity generation and transmission to feed these energy-hungry datacentres, particularly in the US. Companies like the Swiss/Swedish ABB are seeing strong growth in demand for their electrical engineering products on the back of this buildout.
Electricity Infrastructure theme continues to benefit from electricity-hungry datacentre buildout
Despite the ongoing growth in penetration of battery electric and hybrid vehicles worldwide, batteries and the lithium raw material required for these batteries have seen lower prices on fierce competition since 2021. There are signs that this price competition may be peaking, with better days ahead for lithium producers and battery makers as new fast charging technologies are introduced, and as the industrial battery storage market expands quickly.
Battery and Lithium-related ETFs rebound
And a Bonus theme, which is rather speculative… Space
For those who want to invest in a theme which is benefiting from a lot of hype at the moment, you might want to look at the Space Innovators ETF from VanEck.
Here is the factsheet (click on link), which tells you a little more about the ETF and what it holds… Companies with suitably exciting names such as Rocket Lab. There is even a UK company in there, MRO Melrose Industries (which owns the former GKN Aerospace business).
VanEck Space Innovators ETF focuses a lot on satellite-related companies
