Space ETF Shifts From Defense Giants to Emerging Names

The Procure Space ETF (UFO) completed its quarterly rebalance with a rotation toward emerging space companies, adding four new holdings while increasing exposure to lunar exploration and satellite infrastructure providers, according to index reconstitution data.

The shift reflects the index’s methodology of prioritizing newer space businesses as the sector matures beyond traditional defense contractors. UFO has attracted $92.4 million in net inflows over the past year while delivering a 77% return, according to ETF Database.

The S-Network Space Index, which underlies UFO, added Momentus Inc. (MNTS), Sidus Space Inc. (SIDU), GomSpace Group (GOMX), and Space-Communication Ltd. to its portfolio while boosting share counts in several smaller holdings, according to the December reconstitution data.

Ispace Inc., a Japanese lunar exploration company, saw its index allocation rise 38% in the rebalance. Satellogic Inc. (SATL), which provides Earth observation data, received a 31% allocation increase, according to the data.

Redwire Corp. (RDW), a space infrastructure and manufacturing company, also gained exposure with a 14% share increase, according to the data. Rocket Lab USA Inc. (RKLB), a launch services provider, saw its allocation climb 6.3%.

AST SpaceMobile Inc. (ASTS), which is developing space-based cellular networks, received a 5.1% allocation increase, the data shows. The index did not remove any companies during the quarterly reconstitution, but instead adjusted weightings across existing holdings to accommodate the four new additions.

Established Holdings Trimmed

The index reduced its exposure to established telecommunications and defense companies during the rebalance. Eutelsat Group (ETL), an established satellite television provider, saw its allocation drop 16%, according to the data.

Defense contractors Lockheed Martin Corp. (LMT) and Northrop Grumman Corp. (NOC) each saw decreases of less than 2%. Comcast Corp. (CMCSA), which has ground equipment exposure, dropped 1.3%.

AT&T Inc. (T) and T-Mobile US Inc. (TMUS), both telecommunications providers, saw allocation decreases of 2.1% and 1.5% respectively, according to the data.

The Procure Space ETF carries a 0.75% expense ratio and holds $195.5 million in assets, according to ETF Database. The fund launched in April 2019 and rebalances quarterly.

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VettaFi LLC (“VettaFi”) is the index provider for UFO, for which it receives an index licensing fee. However, UFO is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of UFO.

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