Launched in 2019, the Procure Space ETF (NASDAQ: UFO) has established itself as the singular pure-play space-themed exchange-traded fund available to investors within the United States. The fund specifically tracks a curated basket of companies that earn the preponderance of their revenue through operations tightly linked to the space industry, extending from manufacturing to satellite services and space technology. This strict adherence to companies whose business models are deeply anchored in space activities differentiates the Procure Space ETF from other offerings in the same thematic space, and sets its identity firmly as a dedicated vehicle for exposure to the space sector.
Andrew Chanin, CEO of Procure Holdings, emphasized the significance of maintaining this pure-play focus during a recent discussion with Benzinga. "To our knowledge, the Procure Space ETF is the only pure-play space ETF currently available in the U.S. markets," Chanin stated. This concentration on companies whose primary business is related to space is foundational to the firm’s strategy, underpinning its branding and investment philosophy as the definitive space ETF.
In comparison, the Ark Space & Defense Innovation ETF (BATS: ARKX), which entered the market in 2021 under the management of Cathie Wood's Ark Invest, adopts a broader investment approach. Unlike UFO, ARKX includes a wider array of companies with varying degrees of exposure to the space industry. Some of these holdings may be involved in adjacent sectors such as electric vertical take-off and landing (eVTOL) aircraft and defense technology, reflecting a more diversified aerospace and defense innovation theme rather than a strict focus on space activities.
Specifically, Ark Invest’s strategy encompasses companies that may not derive the majority of their revenue from space but still operate within sectors related to aerospace advancements and defense innovations. According to Chanin, while one could argue that many public companies have some connection to space, investors seeking a true pure-play investment desire direct and meaningful involvement in space-oriented business operations.
"Our index, tracked by UFO, is constructed to include companies that make most of their income from space-related products and services," Chanin explained. "It’s not about marginal connections or peripheral involvement in space. The companies we select are actively earning their revenues directly from space operations." This philosophy drives UFO’s portfolio construction and acts as a key differentiator from funds like ARKX.
An examination of the top holdings in both ETFs reveals these strategic differences. The Procure Space ETF’s leading holdings include firms such as Rocket Lab Corporation (NASDAQ: RKLB) and Planet Labs (NYSE: PL), both of which generate significant revenue from space launch vehicles and satellite imaging services respectively. Other notable top holdings in UFO include EchoStar Corporation (NASDAQ: SATS), Garmin Ltd (NYSE: GRMN), and SES SA, each playing substantial roles in satellite communications or space technologies. The ETF’s portfolio is composed of companies where roughly 80% of the index comprises businesses deriving the majority of their revenue from space-related activities, reinforcing the fund’s concentrated sector exposure.
Conversely, ARKX’s top holdings include Rocket Lab and Trimble Inc (NASDAQ: TRMB), found also in UFO’s top ten, but feature additional companies with broader aerospace, defense, or technology profiles. For instance, defense giant L3Harris Technologies (NYSE: LHX) and Kratos Defense & Security Solutions (NASDAQ: KTOS) are prominent holdings in ARKX but represent defense technology firms with less than majority space-derived revenues. Similarly, eVTOL maker Archer Aviation Inc (NYSE: ACHR) and Deere & Co (NYSE: DE), known predominantly for heavy machinery but with ventures into satellite-connected technology, are part of ARKX’s mix. These inclusions highlight Ark Invest’s methodology of blending space exposure with a wider scope of innovative aerospace and defense solutions.
Chanin pointed out the importance of clarity for investors interested in pure space exposure, noting that although it might be tempting for funds to include companies loosely connected to space to broaden appeal, true space investors prefer direct engagement with companies whose primary business is space-based. "Anyone can select companies and argue a space connection," he said. "However, having the majority of revenue coming from space sets a specific standard that we adhere to."
The potential for increased interest in the space investment sector is underscored by anticipated developments, such as a public offering by SpaceX, which could materialize in 2026. Such market events may act as catalysts, driving investors to explore dedicated space investment vehicles like the Procure Space ETF as a means to gain focused exposure in this emerging and technologically advanced sector.
Summing up, the Procure Space ETF offers a targeted approach focusing exclusively on companies whose business is fundamentally based in the space industry, while the ARKX fund captures a wider spectrum, including space-related but not space-dominant enterprises. This distinction matters for investors as it influences risk profiles, revenue exposure, and the nature of technological innovation embedded within the portfolios. For those prioritizing a specialized play on the space economy, UFO represents a pure-play option in the U.S. ETF space, standing apart from broader aerospace and defense funds such as ARKX.