Space ETFs Invest in Mostly Earthbound Stocks

NASA landed a probe on Mars, and billionaires Elon Musk and Jeff Bezos are shooting rockets across American skies. Not to be left out, asset managers are offering their own more prosaic ride into space, using exchange-traded funds. They invest in such things as shuttle parts and astronauts’ food packages, as well as aeronautics and satellite-based technologies. ETF giant State Street Corp. has a new fund focused on exploration of both space and the deep sea, and two smaller providers have their own space funds in the works.

These funds—and a spate of other themed ETFs—tackle a very worldly problem for the financial industry: how to get higher management fees. With more than 2,000 ETFs competing for assets, managers have been forced to lower prices or invent products that can justify a higher charge. Financial advisers are in a similar jam, locked in their own battle against cheap, do-it-yourself internet investment platforms. Assets at discount and online brokerages grew 25 percent in 2017, according to a study from Aite Group.