Seraphim New Space Index UCITS ETF (SERA): Own the New Space Era

Many funds with "space" in the name are really aerospace-and-defence portfolios. They lean on large, established defence contractors, and often include companies with only loose ties to space, so investors end up with only a fraction of their money in the businesses actually driving the New Space boom. SERA is a genuine pure-play. To be included, a company must earn a substantial share of its revenue or strategy from space, measured rather than assumed, across launch, connectivity, Earth observation, defence and in-space services.

For an investor who wants direct exposure to the space economy rather than a repackaged industrials fund, that focus is exactly what sets SERA apart. Unusually for an ETF, the design also allows a small slice, around 10%, in private space companies.

The space economy is on course to be worth around $1.8 trillion by 2035, according to the World Economic Forum, and two forces are driving it there. On the commercial side, reusable rockets and cheaper components have driven launch costs down sharply, letting companies deploy fleets of small satellites and turn space into everyday digital infrastructure for connectivity, imagery and navigation.

On the security side, a global rearmament cycle, from Europe's push for strategic autonomy to NATO spending targets and the US "Golden Dome", is funnelling money into the same imagery, secure-comms and intelligence firms. Because so many space businesses are dual-use, serving commercial and military customers alike, SERA's holdings can draw on both engines at once. The result is one of the defining industrial booms of the coming decades.

SERA is run by Seraphim, a specialist manager that has established itself as a leading name in space investing. It launched the world's first space venture fund in 2016 and the first listed space fund, SSIT, in 2021, now a FTSE 250 constituent, and has backed around 150 companies worldwide, producing nine billion-dollar "unicorns" and five stock-market listings, among them AST SpaceMobile and Astroscale.

That experience shapes the index SERA tracks. Rather than following a standard market index, the fund is built on the Seraphim New Space Index, a rules-based index constructed using Seraphim's own scoring system. Companies are screened to confirm they are genuine space businesses, then ranked on factors such as growth potential, competitive strength and how much of their revenue comes from space. Holdings are weighted by conviction rather than size, so the businesses Seraphim rates most highly count for more, and the index is designed to add promising new names soon after they list.

• Capturing new IPOs: With the space IPO window reopening after SpaceX, proving the fund's ability to add fresh listings will be a strong early sign.
  
  

• Early portfolio results: First earnings updates from major holdings would show whether revenue and contract momentum is holding up as the fund launches.

• The defence spending cycle: European rearmament, NATO targets and sovereign space programmes turning into contracts for the fund's constituents.
  
  

• Fund scale and liquidity: Growing assets under management would tighten spreads, lower costs and signal the fund is establishing itself with investors.

• The march toward $1.8 trillion: Broad, structural growth in the space economy lifting the sector as a whole through the next decade.
  
  

• More of private space going public: As Seraphim-tracked names list, the investable New Space universe deepens and the index has more to choose from.

A pure-play New Space basket is, by design, narrow, and many of its holdings are young companies still scaling toward profitability. Their valuations often rest on future potential rather than today's earnings, which makes for sharp moves in both directions, and the whole basket can swing on shifts in market sentiment. Capital is fully at risk, and returns may be volatile from one period to the next. Because the fund is also priced in US dollars, sterling investors take on currency risk on top of the underlying share-price movements.

Much of the space sector's revenue is tied to government and defence contracts, which makes the fund sensitive to political and policy shifts. A change in defence budgets, tighter export controls, disputes over spectrum, or a single high-profile launch failure can move the whole sector quickly. These are pressures the companies themselves cannot fully control, and because SERA leans toward businesses with heavy government exposure, they feed directly through to the fund. Changing priorities between administrations, at home and abroad, can add a further layer of uncertainty.

SERA will launch as a new vehicle tracking a proprietary index that has yet to be tested in live markets, and it does so without a track record of its own. Like any new ETF, it will start small, and until it grows its shares may trade with wider spreads, meaning slightly higher costs to buy and sell. Space is also an increasingly crowded corner of the ETF market, and funds that fail to attract enough assets are sometimes closed by their provider; that would not cost investors their capital, since holdings are returned at their market value, but it could force an exit at an inconvenient time. For UK and European investors, one point in SERA's favour is that it offers pure-play New Space exposure in a regulated, London-listed fund, where much of the established competition is US-listed and less easily accessed.