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Star Trek fans might think of space as the final frontier. And some of the world’s richest men, like Tesla (TSLA) CEO Elon Musk and Amazon (AMZN) founder Jeff Bezos, have a well-documented fascination with exploring beyond the earth’s boundaries.
But a new ETF from Tuttle Capital Management is the latest indication that looking beyond our own planetary borders could be profitable in the long term. The Tuttle Capital UFO Disclosure AI Powered ETF, announced recently, will soon trade under the ticker symbol UFOD.
UFOD’s success will depend in part on the firm’s reliance on artificial intelligence to help identify stocks of companies that are believed to have an information advantage, due to their proximity to public disclosures from government sources.
AI Meets UFO
It is not difficult to see the intrigue here, especially if you live in New Jersey. Recently, a spate of mysterious flying objects captured national attention. In Tuttle Capital’s view, there’s more out there that is currently unexplained. And that can allow certain companies to be ahead of the curve.
Investors should note that UFOD is a long-short ETF. So in addition to looking for aerospace, defense and technology stocks that could benefit from UFO-focused activities, the fund also seeks to identify short sale candidates, which might fall behind versus their competitors.
New Kid on the… Planet?
This fund joins a trio of space-related ETFs, the largest of which is the $308 million ARK Space Exploration & Innovation ETF (ARKX), run by Cathie Wood’s well-known firm. Two other players in space are the $64 million Procure Space ETF (UFO) and Spear Alpha ETF (SPRX), which has $55 million under management. In a market that is increasingly cautious when it comes to “risk on” ETFs, this group of thematic funds might face some headwinds in the near term.
3 Reasons to Consider Buying the UFOD ETF
- Aerospace and defense stocks have many ways to win beyond the space-related aspect of their business. They are often vital parts of national security, and thus tend to be less cyclical than most industries.
- The long-short aspect of UFOD, while not unique, is likely to see a surge in demand once the stock market comes off its historically high runup, which started in late 2022.
- While AI is new in many respects, viewing it as an extension of many successful quantitative investment strategies gives these types of ETFs a potential long-term edge.
Any new ETF is a blank slate in some respects. But since UFOD will focus on aerospace and defense stocks, we might be able to approximate the fund using a Barchart.com snapshot summary on US Aerospace & Defense Ishares ETF (ITA), a 19-year-old ETF with more than $6 billion in AUM.
UFOD: A Fact Even Jeopardy! Champs Probably Don’t Know
As it turns out, this upcoming ETF has a coincidental relationship with one of science’s space greats, sharing a name. Back in 1862, a comet was discovered by Horace Tuttle, around the same time Lewis Swift also identified it. Thus, the Swift-Tuttle Comet was named. That space entity reportedly takes 133 years to orbit the sun. Talk about long-term investing!
