Space ETF Surges as SpaceX IPO Buzz Builds

With Elon Musk’s SpaceX eyeing an initial public offering that could value the company at over $1 trillion, investors looking for exposure to the space industry can turn to a space ETF that has already delivered outsized returns in 2025.

The Procure Space ETF (UFO) gained 62.6% year-to-date, nearly tripling the 23.4% average return for its global equities category, according to ETF Database. The fund returned 65.3% over the past year, outpacing the category average of 19.6%.

The performance reflects growing interest in space-related companies, from satellite communications providers to rocket manufacturers. UFO tracks 45 companies globally that generate revenue from space-related businesses, offering exposure to an industry that could get a major boost if SpaceX moves forward with its IPO plans.

Reuters reported this week that SpaceX is exploring an IPO that could raise more than $25 billion as early as June. Investors called it potentially the “craziest IPO in the history of the stock market,” with substantial demand expected from retail investors.

UFO attracted $41.2 million in net inflows over the past year, according to ETF Database, bringing its assets under management to $117.9 million. The fund launched in April 2019 and charges a 0.75% expense ratio.

UFO Holdings Span Communications to Defense

The ETF’s top holding is AST SpaceMobile Inc. (ASTS) at 8.5% of assets. It’s followed by Globalstar Inc. (GSAT) at 6.58% and Planet Labs PBC (PL) at 5.58%, according to ETF Database. Other holdings include EchoStar Corp. (SATS), ViaSat Inc. (VSAT), and Rocket Lab Corp. (RKLB).

The fund also holds stakes in traditional aerospace and defense companies with space operations, including RTX Corp. (RTX), Lockheed Martin Corp. (LMT), and Northrop Grumman Corp. (NOC).

UFO uses a tier-weighted methodology that adjusts holdings based on market capitalization and the percentage of revenue companies derive from space-related activities. The S-Network Space Index it tracks returned 46% year-to-date through late November.

The portfolio includes 75.5% U.S. companies, with smaller allocations to Japan, Luxembourg, and Canada, according to the index’s fact sheet. Media and communications companies represent 43.8% of assets, while industrials account for 44.9%.

Smaller holdings in the fund include emerging space companies focused on satellite imagery, space tourism, and lunar landing missions. It thus provides exposure to the industry’s growth areas beyond established satellite operators.

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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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