Despite significant apprehensions many investors have about its massive valuation, SpaceX (NASDAQ: SPCX) has been on a meteoric rise in its early days of trading. The pesky valuation concern—coupled with an unusually small float and the potential for significant pressure on insiders to sell shares down the line—means that many investors who might otherwise be tempted to enter a position in SPCX may instead choose not to, at least not in the immediate aftermath of the largest-ever IPO.
The whole space industry may end up getting a boost because of the excitement over SpaceX, meaning that it could be an opportune time for investors to build exposure to other stocks without the same level of risk as the massive newcomer. Space exchange-traded funds (ETFs) may help to mitigate risk by accessing a broader basket of stocks within the industry. Before some of these funds rebalance, they will likely provide access to the broader industry without necessarily holding SpaceX shares directly—though investors should, of course, watch for whether and when they add a SpaceX position to their list.
UFO Is an All-Purpose Space Fund With Appealing Diversification and Returns
The Procure Space ETF (NASDAQ: UFO) is a go-to space fund with about $1 billion in assets and a strong one-month average trading volume above 2 million. The fund appears likely to remain highly liquid, making it a great option for investors seeking the flexibility to enter and exit a position—or modify its size—frequently as the industry continues to evolve.
UFO's focus on space names across developed markets means its roughly 50 positions can capture developments in technology anywhere they happen. U.S. companies dominate about 70% of the portfolio, but investors in UFO will also gain exposure to firms from Canada, the Netherlands, Japan, and many other parts of the world.
UFO's mandate is also sufficiently broad to allow it to benefit from advances across the entire space industry, from satellite companies to ground equipment and rocket makers to telecoms firms and more.
As such, the portfolio is fairly split between industrials and communications firms, although it also holds stocks from other sectors as well.
At a net expense ratio of 0.75%, UFO is not the cheapest fund available, but its performance this year may make the expense ratio worthwhile: this ETF has returned about 30% year-to-date (YTD) and has almost doubled in the last 12 months.
Space and Defense Combine to Outperform the Market With ARKX
An actively managed alternative to UFO is the ARK Space & Defense Innovation ETF (BATS: ARKX), which comes in at the same annual fee of 0.75%. ARKX is also comparable in terms of asset base and trading volume. What distinguishes this fund is a narrower portfolio of 43 companies that are involved in either space exploration or defense—this includes firms in autonomous mobility and battery technology as well as rocket and robotics makers, 3D printing companies, and more.
As a result, some of the firms in ARKX's portfolio are not pure-play space stocks—the top position, for example, is semiconductor giant Advanced Micro Devices Inc. (NASDAQ: AMD).
Still, ARKX is not limited exclusively to domestic stocks and does hold some international positions, but at a much smaller percentage than UFO (ARKX's portfolio is roughly 90% U.S. companies).
These may be modest trade-offs, given that ARKX has also shown strong performance in recent months. The fund has returned 20% YTD and almost 60% in the past year. It may therefore appeal to investors seeking some space exposure with a bit less of a thematic focus on that area than UFO provides.
A Low-Cost New Entrant That's Untested So Far
The Global X Space Tech ETF (NASDAQ: ORBX) launched in April 2026 and has net assets of only about $58 million, making it significantly smaller—and potentially higher-risk—than the other funds above. However, it also comes with a lower fee of 0.50% per year. ORBX focuses on an index of global space businesses involved in developing rockets and launch systems, providing technology and components, delivering satellites and services, and so on.
ORBX has three dozen positions, but close to 30% of the portfolio is given over to just two companies—Rocket Lab Corp. (NASDAQ: RKLB) and AST SpaceMobile Inc. (NASDAQ: ASTS). Domestic stocks are about 78% of the basket, followed by Japanese and Canadian names, as well as companies from a host of other countries.
With much less of a track record than UFO or ARKX, ORBX may be harder to assess; its all-time return is modestly positive, but that could certainly change over time.
With the launch of SpaceX, investors may want to watch how this lower-cost alternative adapts going forward.
The article "3 Space ETFs for a Timely Investment" first appeared on MarketBeat.
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