BlackRock lists the new iShares Space Technologies UCITS ETF (STAR) on the LSE

The fund tracks the STOXX Global Space Satellites and Drones Index and has a Total Expense Ratio of 0.50%, with a share class denominated in US dollars.

The product is registered for distribution in Austria, Denmark, Finland, France, Germany, Ireland, Italy and Luxembourg, in addition to the Dutch and German listing markets.

Exposure: from rockets to satellites, drones and autonomous technologies

STAR invests in companies active in the production of satellites, drones and rockets, as well as in the related supply chains. The aim is to capture the long-term growth opportunities offered by the space economy, a rapidly evolving sector that is shifting from a historical dominance of government bodies to a complex industrial ecosystem, fuelled in part by well-capitalised private operators and rising defence spending.

The exposure covers the entire value chain: from launch vehicle manufacturers, to satellite operators for communications, Earth observation and navigation, to developers of drones and autonomous systems.

STOXX Global Space Satellites and Drones Index Methodology

The benchmark index was developed by STOXX and uses a two-tier methodology based on FactSet RBICS revenue classifications. Included are companies that generate at least 25% of their revenue from activities related to space, drones or satellites. The second tier incorporates data on supply chain relationships with space agencies, major private aerospace firms and ‘pure players’ in the Space and Missile Equipment Manufacturing sector, thereby also capturing companies with significant exposure to the broader space ecosystem.

The starting universe is the STOXX World AC Universal All Cap. All candidate stocks must pass screening for controversial weapons and violations of international norms (norms-based screening) conducted by ISS Sustainability.

Fast Entry Mechanism for IPOs

A distinctive feature of the index is the fast-track inclusion mechanism for new listings. Companies that meet the thematic and size requirements can be included via interim reviews, typically within 10–30 days of listing, rather than waiting for the next scheduled rebalancing. This approach addresses a phenomenon documented by BlackRock research: newly listed companies are not usually included promptly in traditional equity indices, with a time lag between their stock market debut and inclusion in benchmarks that can penalise passive investors in highly innovative sectors.

The context: an expanding space economy

According to estimates by the World Economic Forum and McKinsey & Company, the global space economy is set to reach $1.8 trillion by 2035, starting from a base of around $630 billion in 2023. This would represent an average annual growth rate of around 9%, higher than that forecast for global GDP. Five sectors — supply chain and transport, food and drink, government defence, retail and consumer, and digital communications — are expected to generate around 60% of the total value by 2035.

Enabling factors include the structural decline in launch costs, the roll-out of mega-satellite constellations for broadband, increased defence spending in major countries, and the maturation of new commercial services based on Earth observation and geolocation.

Omar Moufti, Thematics & Sectors Product Strategist at BlackRock, commented: “With falling launch costs and the growing proliferation of satellites, the space economy is becoming an increasingly important long-term investment theme. STAR covers the entire space value chain, from rockets to satellites to autonomous technologies, within an ecosystem where each layer enables the next. STAR’s rapid access and strong thematic focus offer a differentiated way to capitalise on opportunities in an expanding market.”