The space economy

Investors also attached value to earlier-stage opportunities in solid-state battery electrolytes and ceramic components for satellite communications.

The standout contributor to absolute and relative performance was launch and satellite broadband groundbreaker SpaceX, which conducted a successful initial public offering during the quarter.

Our stand-out contributor to absolute and relative performance during the period was launch and satellite broadband groundbreaker Space Exploration Technologies Corp. (SpaceX), which conducted a successful initial public offering during the quarter.

Ovzon is a Swedish satellite communications company that provides secure satellite Internet, communications services and the equipment needed to access them, primarily for defense and government customers operating in remote or mission-critical environments.

The huge reduction in launch costs in recent years sparked the creation of several highly innovative satellite companies that are now increasingly mature yet still fast-growing businesses active in the defence and climate change sectors.

That relationship became even more notable after Amazon announced an agreement to acquire Globalstar and partner with Apple to support satellite-enabled services such as Emergency SOS and direct-to-device connectivity.

We employ a core-satellite approach here: a foundation of broad-based ETFs providing diversified exposure across U.S. and International equity markets, complemented by satellite positions in ETFs offering targeted thematic, factor, or sector exposures intended to enhance diversification and total return.

It has built a vertically integrated operating system for the space economy.

Examples of these companies include electric vehicle leader Tesla, Inc. , commercial satellite and launch company, Space Exploration Technologies Corp. and e-commerce platform provider Shopify Inc.

Competition is intense from both fixed wireless providers and low earth orbit satellite (Starlink).

The Fund managed to overcome style-related headwinds because of strong stock selection associated with the Fund’s sizable position in rocket, satellite, and spacecraft manufacturer Space Exploration Technologies Corp. (SpaceX) , which completed its highly successful public offering during the quarter.

The core retail business (retail excluding advertising) continues to show improving profitability despite rising launch costs for Amazon’s satellite service.

We anticipate earnings power could improve meaningfully as utilization recovers, while the company’s growing exposure to data center, AI and low Earth orbit satellite applications may provide accelerating secular growth drivers at a still reasonable valuation.

In communication services, we added to TELUS on weakness as sentiment remained pressured by the CEO transition, dividend concerns, competition, macro headwinds and perceived satellite disruption.

By combining SpaceX’s operations with Starlink, the dominant satellite Internet provider, the company plans to extend this playbook into AI infrastructure scaling orbital data center compute.

Fabrinet is a leading contract manufacturer for optical communications components used in data center and telecom networks, where AI compute demand is driving a generational upcycle, while MACOM’s compound semiconductor expertise offers differentiated exposure to AI, defense and satellite communications.

Lack of exposure to bitcoin mining companies (technically software) and satellites comprise the balance of the underperformance.

Led by Elon Musk, the company has reshaped the economics of going to space, built a formidable satellite-communications network through its Starlink subsidiary, and captured a level of public imagination that few businesses achieve.

The company has benefited from a favorable profit cycle across its data center, industrial, defense and telecom end markets, supported by strength in optical networking, satellite communications and defense systems.

They are becoming a real “Prime” for space projects and they have invested $300M in a new manufacturing building which has the capacity to produce 400 satellites per year.

Amplitech (which I shared my long thesis in the fund’s Q1 investment letter) returned even more in Q2 at 266% driven on a narrative pushed by retail investors that Amazon has become a client and that their devices will be used in future satellite launches.

The market started to realize at the beginning of this year that the company now sits at the intersection of two of today’s biggest end-market growth drivers: artificial intelligence (AI) and defense, not to mention its growing exposure to space satellites.

The value of Nextnav’s spectrum continues to rise as the idea of satellite direct to device communications continues to take hold, and I continue to believe that patiently waiting for the wheels of government to grind forward is our best path forward.

Both estimates rely heavily on satellite imagery interpreted by commercial third-party providers rather than on transparent reported statistics.

In addition, Amazon is aggressively building out its promising Leo satellite service that will compete with Starlink.

We participated in the IPO of satellite manufacturer York Space Systems, Inc. (YSS) and exited our small position during the quarter to fund other opportunities.

We participated in the IPO of satellite manufacturer York Space Systems (YSS) and exited our small position in the quarter to fund other opportunities.

Conversely, shares of MACOM Technology Solutions, an analog semiconductor solutions provider, ascended 30% after the company reported another robust quarter and investors gained a deeper appreciation for its LEO satellite opportunity.

Similarly, shares of MACOM Technology Solutions, an analog semiconductor solutions provider, ascended 30% after the company reported another robust quarter and investors gained a deeper appreciation for its LEO satellite opportunity.