Market Musings 130925: Is Space the Final Frontier?
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
Just a few thematic ideas with strong momentum at present for you to look at…
Have a great week everyone,
Edmund
Disclaimer
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9 comments
This is a good profile on Rocket Lab (NAQ:RKLB) ….
?si=BvzbXePq-t-K2rTDI think those ETFs such as SSIT which invest in private companies rather than ones you can buy directly are interesting. We also have Filtronic (LON:FTC) for space theme.
GE Vernova (NYQ:GEV) into SMRs and electrical generation but at $625 a share it might be for options traders.
Was waiting for the "wheels to fall off" BAE Systems (LON:BA.) and Rolls-Royce Holdings (LON:RR.) but a touch of FOMO is creeping in.
Thanks Edmund for flagging the Space Innovators ETF. I rashly invested in Rocket Lab (NAQ:RKLB) on my space-mad 15-year old's recommendation and it's turned out to be my best investment in recent years despite volatility that makes rocket fuel look stable, returning 5x. Sadly, but maybe wisely, I only put in £1,000. I made a more serious investment in Seraphim Space Investment Trust (LON:SSIT) but that, despite recent gains, is anothewr story.
Lovely story MM. Does your 15-year old have any other recommendations?
Had a similar experience with my lads recommending a little Nottingham company (GAW). Like you, I took a small stake for a bit of fun. Turned out to be a very amusing and enduring family bonding experience. "Dad's best performing investment - picked by the lads" (damn those pesky kids! I'll beat them one day!)
My lads, now in their 30s, are still mad for GAW's product. I thought they might get interested in investing off the back of it but no. Not yet anyway.
GAW must have been a fun journey. Sadly, he has no current recommendations other than "don't sell Rocket Lab" (NB it breaks every rule in the CVM book except the M! )
With regard to Space there is also a listed investment trusts Seraphim Space Investment Trust (LON:SSIT)
In reality Seraphim Space Investment Trust (LON:SSIT) is more of a defence themed trust - but what is more compelling is the large notional discount of c30% which is based on a stale NAV which is in reality higher still - so in effect the discount is even larger
- recent retrace appears like an attractive entry level
Peter, I think there is more than just defence- ICEYE uses radar to monitor changes on the earth, D-Orbit is a space logistics company, all Space is a mesh network for satellite connectivity, Leolabs is a mapping service. So they are involved in insurance, climate, datacentres, communications, maritime as well as defence.
The discount is attractive, I have bought in a couple of times recently and is a key holing for me.
Interesting volume on Seraphim Space Investment Trust (LON:SSIT) yesterday, 5.5 million shares in 2 trades.