UFO: A Pure Play Fund Targeting The Space Economy

Image Source: Jeremy Thomas on Unsplash

Many space companies contributed to NASA’s awe-inspiring Artemis II mission and have seen their stocks soar as there is massive interest in the lunar economy. So, let’s talk about the Procure Space ETF (UFO), the first pure-play space ETF, writes Neena Mishra, director of ETF Research at Zacks Investment Research.

SpaceX filed its IPO paperwork with the SEC recently. Bloomberg reported that the space company plans to raise as much as $75 billion in the offering – for a target valuation of over $2 trillion. Founded in May 2002, SpaceX now holds a de facto monopoly on rocket launches, and its satellite internet division, Starlink, is reportedly a major cash generator.

Procure Space ETF (UFO) Chart

Like many high-profile startups, it has remained private as institutional investors continued to pour money into the firm. Now, Elon Musk’s ambition to build data centers in space is helping drive the company’s IPO plans. Orbital data centers would require hundreds of billions, if not trillions, of dollars.

Blue Origin, founded by Amazon Inc.’s Jeff Bezos, is pursuing similar orbital data center concepts, while Alphabet Inc. is working on a space-based data center project, codenamed Suncatcher, with test launches expected in 2027.

Overall, the global space economy is expected to reach $1.8 trillion by 2034, up from $613 billion in 2024, according to McKinsey. The UFO fund offers exposure to the trend by primarily investing in companies that derive a majority of their revenues from space-related industries.

Planet Labs PBC, Rocket Lab Corp., EchoStar Corp., and ViaSat Inc. are among its top holdings.

About the Author

Neena Mishra, CFA, FRM, is the director of ETF research for Zacks Investment Research. Prior to that, she spent approximately 15 years with the Reserve Bank of India, the Indian equivalent of the Federal Reserve Board, where she supervised the financial sector and managed the country's foreign exchange reserves.

Ms. Mishra is frequently sought after by the media for her insights on ETF-related topics. Her expert commentary on ETFs has appeared in major financial media outlets, including The Wall Street Journal, Financial Times, CNBC, Barron's, and MarketWatch. She holds an MS in Physics from Lucknow University, India, and an MBA in Finance from the University of Georgia.