Space ETF UFO Sees Strong Gains Amid SpaceX IPO Speculation

The Procure Space ETF (UFO) has delivered significant returns for investors, gaining 66.36% in 2025 compared to the S&P 500's much more modest increase. As speculation mounts about a possible SpaceX IPO before the end of 2026, market participants are assessing whether UFO can maintain its strong performance. The ETF tracks the S-Network Space Index, which includes companies with substantial revenue from space-related activities. Since its launch in April 2019, UFO has grown to hold $360 million in assets with an expense ratio of 0.94%. The fund focuses primarily on Industrials and Media & Communications sectors, which together account for 88% of its holdings. Major components include Planet Labs and MDA Space, while defense contractors like Lockheed Martin and Northrop Grumman also feature in the portfolio. Although SpaceX is not currently part of the ETF, its potential IPO could significantly impact the fund. Prediction markets suggest a 93% probability of a SpaceX IPO by year-end 2026, with reports indicating the company may file its prospectus with the SEC imminently. A successful listing could lead to a valuation of $1.75 trillion and raise over $75 billion. If included in the index, SpaceX's weighting could dramatically alter the ETF's composition. UFO has continued to perform well, rising 103% over the past year and 11% year-to-date through late March 2026. However, recent declines in some key holdings like Rocket Lab and AST SpaceMobile highlight the volatility inherent in this space-focused investment. While a SpaceX IPO could drive further gains, the ETF's future performance remains closely tied to the company's public listing timeline and the broader commercialization of space.