Space index funds give investors a way to get in on the growing space economy through portfolios managed by professionals who track space-related market indices. These funds blend the perks of traditional index investing with targeted access to aerospace, satellite, and space exploration companies.
Space index funds track indices focused on companies doing space-related work. Investors pool their money, and the fund buys shares in aerospace manufacturers, satellite operators, space tech developers, and defense contractors.
Most space index funds follow benchmarks like the S&P Kensho Final Frontiers Index or the S-Network Space Index. Fund managers buy and sell stocks to keep up with the performance of their chosen index.
You’ll usually find 30 to 50 companies in these funds. Big names like Boeing, Lockheed Martin, and RTX Corporation show up a lot, but there are also emerging space technology firms in the mix.
With one purchase, investors get instant diversification across the space sector. You get exposure to satellite communications, launch services, space manufacturing, and defense applications all at once.
Space index funds focus on a single sector, not the whole market. Traditional index funds like the S&P 500 spread investments across every industry, but space funds stick to space-related businesses.
Expense ratios for space funds usually fall between 0.35% and 0.75%. That’s a bit higher than broad market funds—guess that’s the price for specialized investing and smaller fund sizes.
Space funds tend to be more volatile than traditional index funds. The sector reacts a lot to government contracts, launch outcomes, and new tech.
Most space index funds pay tiny dividends, usually under 1%. Companies here often reinvest in research and development instead of paying out big dividends.
The companies inside these funds earn money from government contracts, commercial satellite services, and aerospace manufacturing. That creates a different risk profile compared to funds that focus on consumer companies.
Pure-play space funds like the Procure Space ETF (UFO) only include companies that make at least half their revenue from space activities. These funds give you concentrated exposure, but they don’t diversify as much.
Aerospace and defense funds such as the iShares U.S. Aerospace & Defense ETF (ITA) mix in traditional defense contractors with space companies. With these, you get broader exposure to companies supporting space activities.
Technology-enabled space funds like the ARK Space Exploration & Innovation ETF (ARKX) invest in both space companies and enabling tech. These actively managed funds might include GPS manufacturers, satellite communication providers, and robotics companies.
Most space index funds use the ETF structure. Space ETFs trade on major exchanges during market hours, so investors can buy or sell whenever they want.
Space-focused ETFs open up opportunities to invest in companies building satellite tech, launch systems, and space infrastructure. Three funds really stand out for their unique approaches to the commercial space sector.
ARK Space Exploration & Innovation ETF takes an active approach to space investing. The fund charges a 0.75% expense ratio and launched in March 2021 under ARK Invest.
ARKX defines space exposure pretty broadly. You’ll see traditional aerospace companies alongside tech firms that make space activities possible. Big holdings include Trimble, Kratos Defense, Iridium, Boeing, and Amazon.
Key characteristics:
The fund picks up companies benefiting from satellite infrastructure growth. Netflix and Amazon even show up, thanks to their satellite streaming and cloud computing services for space.
Investors get exposure to both established defense contractors and emerging space technology firms. Active management lets the fund adapt as the space economy changes.
Procure Space ETF delivers the most focused exposure to pure space businesses. UFO tracks the S-Network Space Index and has kept a 0.75% expense ratio since April 2019.
This fund sticks to companies making real money from space operations. Top holdings include SES SA, Eutelsat, Intelsat, Garmin, and Iridium Communications.
Portfolio characteristics:
UFO offers direct access to satellite communication providers and hardware manufacturers. The fund includes ground equipment companies that keep satellite operations running worldwide.
Managers use a passive approach, tracking an index of established space players. Investors get concentrated exposure to companies with real space revenue, not just speculative bets.
SPDR S&P Aerospace & Defense ETF gives indirect space exposure through established defense contractors. XAR keeps its expense ratio at 0.40% and offers plenty of liquidity.
The fund includes big aerospace companies with major space contracts. Holdings feature Raytheon Technologies, Lockheed Martin, Boeing, and Northrop Grumman.
Investment highlights:
XAR taps into space growth via traditional aerospace manufacturers. These companies build satellites, launch vehicles, and space systems for both government and commercial clients.
You’ll often notice lower volatility here compared to pure space ETFs. Investors get space industry growth but also benefit from diversified aerospace and defense revenues.
Investors looking for space exposure can also pick established defense-focused ETFs. These funds include big space contractors like Boeing, Lockheed Martin, and Northrop Grumman, along with traditional aircraft makers.
iShares U.S. Aerospace & Defense ETF stands as the biggest fund in this space. ITA tracks the Dow Jones U.S. Select Aerospace & Defense Index and usually holds 30 to 40 stocks.
Key Holdings:
ITA charges a 0.40% expense ratio. The fund gives you broad exposure to commercial aviation and defense contractors working on space projects.
Space companies make up about 15-20% of the portfolio. That includes satellite manufacturers, rocket builders, and space service providers.
Invesco Aerospace & Defense ETF takes a different tack. PPA uses equal weighting, not market cap weighting like ITA.
This approach gives smaller space companies more say in the fund. Companies like Virgin Galactic and other emerging firms get the same allocation as the giants.
PPA Characteristics:
The fund rebalances every quarter to keep equal weights. That means more exposure to pure-play space companies than you’ll find in traditional aerospace ETFs.
SPDR S&P Aerospace & Defense ETF (XAR) tracks a different index than ITA. XAR includes both large and small companies in aerospace.
European Options: International investors can check out European aerospace funds through STOXX Europe. These give access to Airbus, Thales, and other European space contractors.
Sector Considerations: Global defense spending hit $2.72 trillion in 2024. That money supports space defense programs and satellite systems.
Most aerospace ETFs charge between 0.40% and 0.60% in annual fees. Space exposure varies from 10% to 25%, depending on the fund’s mix.
Space index funds call for different strategies based on your risk tolerance and goals. Aggressive growth investors target emerging space companies with big potential, while conservative folks stick with established aerospace firms that have proven space contracts.
Growth-minded investors can maximize space exposure with funds like ARK Space Exploration & Innovation ETF (ARKX). This approach targets companies building breakthrough technologies in satellite communications, launch services, and space infrastructure.
Pure space plays offer the highest upside, but they’re also the most volatile. The Procure Space ETF (UFO) zeroes in on companies making most of their money from space—think satellite operators like SES SA and Iridium Communications.
Diversifying within the space theme helps reduce risk. Investors can spread bets across satellite manufacturers, launch services, and ground equipment firms. This method works best for those with long time horizons—say, five years or more.
Liquidity matters in growth-focused space funds. Newer ETFs might have wider bid-ask spreads and lower trading volumes, so it’s smart to check assets under management before making big moves.
Conservative investors can get space exposure through established aerospace and defense funds. The iShares U.S. Aerospace & Defense ETF (ITA) includes giants like Lockheed Martin and Boeing, both with hefty NASA and Space Force contracts.
Mixed-theme funds give balanced exposure without putting all your eggs in one basket. The SPDR S&P Kensho Final Frontiers ETF (ROKT) combines space companies with deep-sea exploration firms and charges a lower 0.45% expense ratio.
Defense contractors bring stability during market downturns. They hold long-term government contracts for satellite systems and launch vehicles, so revenue tends to stay steady even when markets get rocky.
Diversifying across market caps helps keep volatility in check. Large-cap aerospace firms offset the risk of smaller pure-play space companies. This approach fits investors who want space exposure without too much concentration.
Space ETFs let investors own pieces of both established aerospace giants and up-and-coming space tech companies. You’ll find traditional defense contractors alongside innovative satellite operators and manufacturers.
Lockheed Martin lands in many space-focused ETFs as one of the world’s biggest aerospace and defense companies. They build satellites, spacecraft, and missile defense systems for NASA and the Department of Defense.
RTX Corporation and Boeing also take up big spots in multiple space ETFs. RTX delivers satellite communications and space systems, while Boeing manufactures rockets and crew capsules for NASA.
GE Aerospace shows up as a top holding in funds like iShares U.S. Aerospace & Defense ETF (ITA). They supply engines and advanced tech for space.
These leaders get most of their revenue from government contracts. That steady cash flow appeals to ETF managers looking for balanced portfolios.
Maxar Technologies stands out as a major satellite manufacturer and Earth intelligence provider. They build high-res imaging satellites and offer geospatial data services to government and commercial clients.
Rocket Lab USA has become more prominent in space ETFs after some solid stock performance. They launch small satellites and make spacecraft components, holding significant positions in both ARKX and UFO.
Iridium Communications runs a global satellite constellation for voice and data. You’ll spot them in several space-focused funds, thanks to their established network.
Globalstar provides satellite communications worldwide. Both Globalstar and other satellite operators benefit as demand for space-based internet and communications keeps climbing.
The global space economy hit $613 billion in 2024. It’s still expanding fast, with growth showing up across a bunch of different sectors.
Investors are finding opportunities everywhere—from satellite communications to space exploration tech. It’s a market that’s opening up new paths for growth, and honestly, it’s kind of wild how quickly things are changing.
The space industry shifted from being mostly government-run to a buzzing commercial ecosystem. Companies like SpaceX, Blue Origin, and Virgin Galactic keep pushing forward, especially in launch services and space tourism.
Global funding in the space economy topped $5 billion in 2024. That jump shows investors feel pretty good about satellite communications, launches, and all sorts of new tech.
Defense spending is another big piece of the puzzle. President Trump floated the Golden Dome missile defense idea, which could need up to $542 billion. NATO wants to boost defense spending to 5% of GDP, which would funnel a lot more cash into space tech.
Space exploration gets a boost from both public and private money. NASA’s commercial crew program teams up with private companies to cut costs and send up more missions.
The S&P Kensho Space Index rose 49% over the past year, while the S&P 500 only managed a 12% gain. That gap says a lot about how investors see the space sector’s future.
Satellites are making climate monitoring more valuable. They deliver essential data for disaster management, weather forecasts, and tracking the environment.
Satellite connectivity leads the space economy right now. More people want global internet, especially in out-of-the-way places, and that keeps satellite operators busy.
Low Earth Orbit (LEO) satellite constellations are growing the fastest. Companies send up thousands of small satellites to deliver high-speed internet just about anywhere.
Commercial satellite services help industries like agriculture, logistics, and telecom. Farmers check crops by satellite, and shipping companies use them to track ships across the globe.
Military and defense teams rely on secure satellite communications. Government contracts give satellite operators and manufacturers steady, long-term revenue.
5G networks need satellites to reach rural and remote spots. That’s creating new partnerships between telecoms and satellite companies.
Satellite manufacturing is changing too. Standardization and mass production make satellites smaller and cheaper, so more businesses can get into the game.
Space tourism is opening up new revenue streams in the space industry. Companies now offer suborbital flights, orbital trips, and even talk about lunar tourism.
Space manufacturing is getting attention thanks to zero gravity. Pharmaceutical firms experiment with protein crystals and fiber optics in space labs.
Asteroid mining companies work on tech to pull minerals from near-Earth asteroids. They’re after rare earth elements and water, which future missions will need.
Space hotels and orbital labs are becoming real projects. Private stations will welcome tourists, researchers, and companies looking for microgravity.
The lunar economy is on the table too, with plans for mining and research bases. Companies hope to extract water ice and minerals from the Moon.
Space debris removal is a growing business. Companies invent ways to grab and get rid of dead satellites and junk orbiting Earth.
Industry analysts expect the space economy to reach $944 billion by 2033. Growth touches everything from tourism to manufacturing, and it’s opening up all sorts of new investment chances.
The space tourism industry is taking off, with several companies now flying regular folks to space. Space-focused ETFs let investors get in on the action through shares in aerospace and tourism companies.
Private companies have turned space tourism into something real for paying customers. Blue Origin gives people suborbital flights that reach the edge of space—about 100 kilometers up.
Virgin Galactic runs similar suborbital flights from Spaceport America in New Mexico. SpaceX raised the bar with orbital missions and even pulled off the first all-civilian orbital flight in 2021.
Those longer missions last several days, while suborbital trips are over in minutes.
Current pricing really shows how exclusive this is:
Companies are working on ways to make it cheaper. Virgin Galactic wants to fly monthly. Blue Origin is building bigger ships to carry more passengers.
Space hotels are next. Axiom Space is planning commercial stations for people to stay in orbit. Orbital Assembly Corporation is designing rotating stations to create artificial gravity.
Space ETFs let you tap into tourism growth through aerospace investments. The ARK Space Exploration ETF (ARKX) includes companies building space tourism tech.
SPDR S&P Kensho Final Frontiers ETF (ROKT) follows the wider space economy, including tourism.
These funds hold aerospace manufacturers that make spacecraft for tourism companies. Boeing and Lockheed Martin supply hardware, while smaller firms focus just on tourism flights.
ETF holdings benefit from tourism growth in a few ways:
Analysts expect the space tourism market to hit $10.09 billion by 2030. That’s a 44.8% compound annual growth rate from 2024.
Investors can spread their bets without picking just one tourism company. ETFs help manage risk across different space sectors.
Space index funds give investors a way to own pieces of many companies in the growing space sector, all through a single ETF. You don’t have to dig into individual space stocks, and you get more trading flexibility than with old-school mutual funds.
Space index funds help spread risk by investing in dozens of space companies. The S&P Kensho Space Index, which a lot of funds track, covers aerospace manufacturers, satellite operators, and defense contractors.
UFO includes giants like Boeing and Lockheed Martin, plus smaller satellite firms. This mix helps protect investors if one company stumbles or space programs get delayed.
Space ETFs give you exposure to several industry segments:
The ARKX fund blends classic aerospace firms with new tech startups. That way, you catch growth from both established players and up-and-comers.
Most space funds hold 50-80 companies, so if one has a bad quarter, it doesn’t drag down your whole investment. When SpaceX delays a launch or a satellite operator hits a snag, a diversified fund weathers it better than betting on one stock.
Space ETFs trade all day on major exchanges, unlike mutual funds that only price at the end of the day. You can buy or sell shares of ARKX, UFO, or ITA whenever the market’s open.
That flexibility matters, especially when big space news breaks. If NASA hands out new contracts or a company reports earnings, ETF investors can react instantly.
Space ETFs usually have tight bid-ask spreads, thanks to their liquid holdings. Big aerospace companies like Boeing and Northrop Grumman see heavy trading, which keeps costs down.
The ITA aerospace and defense ETF, for example, trades more than 500,000 shares daily. That kind of liquidity lets investors move in or out without moving the price much.
The ETF structure allows authorized participants to create or redeem shares as needed, which keeps prices close to net asset value. That helps avoid the big premiums or discounts you sometimes see in closed-end funds.
Space index funds come with their own set of challenges. Market swings can be extreme, and this sector has risks that traditional investments mostly avoid.
These funds follow a young industry where breakthroughs and rule changes can mean big wins—or big losses. Financial risks are just part of the game.
Space index funds can swing wildly, sometimes way more than the overall market. One rocket failure or a successful launch can move the fund’s price in a matter of hours.
This sector is still pretty speculative. A lot of companies in these funds barely make money and spend billions on R&D. So, stock prices can rise or fall based on headlines, not profits.
Market concentration makes things riskier. Most funds hold a lot of the same companies—SpaceX suppliers, satellite makers, launch providers. If one big player hits trouble, the whole fund feels it.
Space companies depend on government contracts and regulatory approval. If NASA changes funding or the FAA tweaks launch rules, it hits several holdings at once.
Technical risks are everywhere. Failed satellite launches, rocket explosions, or mission delays can send space stocks tumbling in no time.
Space companies work in a world where one technical failure can wipe out years of effort and cash. Unlike software, you can’t just patch a bug—hardware failures often mean the whole mission’s lost.
Regulatory red tape is a constant headache. Companies need sign-off from the FAA, FCC, and international groups. If rules change on debris, launches, or frequencies, entire business models can go sideways overnight.
The competition is tough. Old-school aerospace giants and new startups are all fighting for a piece, which squeezes profits and can make existing tech outdated fast.
Geopolitics adds more risk. International conflicts can affect satellites, launch partnerships, and tech sharing. Export controls can shut companies out of markets, hurting fund performance.
Long development cycles mean companies often burn through cash for years before making any money. If the economy turns sour, funding dries up, and some promising companies might not survive long enough to turn a profit.
Picking a space index fund takes some digging into what’s actually inside. Most space ETFs track specific aerospace and satellite indices, so you need to know which companies each fund really owns.
Space index funds can look very different depending on their focus. Most require at least 80% of holdings to come from companies making most of their money from space-related operations.
Some funds stick to satellite communication companies like Iridium and Globalstar. Others include big aerospace names like Boeing and Lockheed Martin, which do both space and defense work.
The best funds have clear rules for what counts. Companies should either run space-based operations or make critical products for space. That means launch vehicle makers, satellite producers, and ground infrastructure suppliers.
Key holdings to check out:
Take a close look at each fund’s top 10 holdings. Some “space” funds actually hold a lot of traditional defense contractors, where space is just a small part of their business.
Space index funds usually have higher expense ratios than broad market funds because they’re more specialized. Most space-focused ETFs charge somewhere between 0.45% and 0.75% per year.
It’s worth comparing expense ratios side by side—those small differences really add up. For every $10,000 you invest, a fund charging 0.75% will cost you $75 each year, while a 0.50% fund only costs $50.
You’ll generally find that space index funds cost less than actively managed space mutual funds. Active funds often tack on management fees of 1.0% to 1.5%, and there could be sales loads or redemption fees too.
Additional costs to keep in mind:
Double-check if your broker offers the specific space index fund without extra transaction fees. Some platforms still charge as much as $49.95 per trade for certain specialized funds.
You can find most space index funds trading as ETFs on major US stock exchanges. Just use any standard brokerage account to buy them during market hours.
Popular space ETFs like UFO (Procure Space ETF) and ARKX (ARK Space Exploration ETF) are available through all the big online brokers—Fidelity, Charles Schwab, E*Trade, you name it. Usually, you don’t need to meet any minimum investment beyond the price of one share.
Trading considerations:
Some international space funds are harder to access on US platforms. If you want to invest in European or Asian space companies, check your broker’s international fund options.
Pay attention to the fund’s average daily trading volume. Higher volume usually means tighter bid-ask spreads and easier trading, especially for larger orders.
Analysts expect the space economy to shoot past $1 trillion by 2030, opening up big opportunities for index fund growth. New tech breakthroughs and more commercial uses are driving a wave of investor interest in space-focused funds.
Space index funds are in a good spot for major expansion as the commercial space sector grows up. The satellite communications market alone could pull in hundreds of billions in revenue over the next decade.
Investors have been pouring money into space-focused ETFs. The ARK Space Exploration & Innovation ETF (ARKX) has over $406 million in assets, which shows both institutional and retail demand is strong.
Key growth drivers:
Fund managers expect space tech companies to grow revenue at 15-25% per year. That’s way faster than most traditional aerospace and defense sectors.
International expansion is another opportunity. Space agencies and private companies in Europe and Asia are starting to make a bigger impact.
Space tech innovation keeps creating new investment categories for index funds. Reusable rockets have slashed launch costs by over 90% in some cases.
Zero-gravity manufacturing is becoming a thing. Companies are working on making fiber optics, semiconductors, and even pharmaceuticals in space.
Breakthrough tech changing fund composition:
Fund managers are starting to include companies working on space elevators, nuclear propulsion, and orbital manufacturing. These ideas could transform the space economy within the next couple of decades.
Artificial intelligence is getting integrated with satellite networks and opening up new revenue streams. There’s a lot of venture capital flowing into space-based data processing and real-time analytics.
As space tech and terrestrial applications merge, the market for space index funds keeps getting bigger.
Investors who are thinking about space index funds usually want to know about performance, risk, and what it takes to get started. These funds track companies in satellite communications, launch services, and space tech development.
The Procure Space ETF (UFO) and ARK Space Exploration & Innovation ETF (ARKX) are the main players in the space index fund world. UFO focuses on companies that make most of their money from space. ARKX takes a broader approach and includes firms involved in space innovation and enabling tech.
SPDR S&P Kensho Final Frontiers ETF (ROKT) combines space and deep-sea exploration companies. The iShares U.S. Aerospace & Defense ETF (ITA) gives you indirect space exposure through defense contractors with big space contracts.
ARKX manages the largest assets at $406 million. UFO gives you more direct space industry exposure with holdings like SES SA, Eutelsat, and Iridium Communications.
Space index funds come with higher volatility than traditional sector funds, mostly because the space economy is still emerging. Investors should look at how concentrated the fund’s holdings are and whether it’s geographically diversified. Funds that lean heavily on small-cap companies or early-stage ventures carry more risk.
Expense ratios for major space funds fall between 0.40% and 0.75%. Higher fees can eat into your long-term returns, especially in a volatile sector.
Liquidity is all over the map with space index funds. Some have thin trading volume, which can make it harder to get in or out at a good price. The sector’s reliance on government contracts and regulatory approval adds extra layers of political and regulatory risk.
Space index funds follow set benchmarks like the S-Network Space Index, sticking to rules about what companies they hold. ARKX is actually an actively managed fund, so its managers can adjust holdings based on what’s happening in the market or with specific companies.
Active funds usually charge higher fees but might outperform during market swings. Index funds give you steady exposure to the space sector without the risk of a manager making bad picks.
Index funds are more transparent—you know exactly which companies are in the fund. Active funds can change holdings often, and they don’t always tell shareholders in advance.
Most space index funds don’t require a minimum investment besides the price of a single share. For major space ETFs, share prices usually fall between $15 and $50. Many brokerage platforms let you buy fractional shares if you want.
Some retirement accounts might set minimums for ETF purchases, usually between $100 and $1,000 depending on the broker.
Commission-free ETF trading is now the norm at major brokers, so you don’t have to worry about extra costs for small investments in space index funds.
Space index funds spread their investments across the whole space industry—satellite operators, launch providers, ground equipment manufacturers, and more. UFO, for example, holds companies from satellite communications, space hardware, and orbital services.
Geographic diversification depends on the fund. Some stick to U.S. companies, while others include international space firms from Europe and Asia. This helps reduce reliance on any one country’s space program.
Funds balance large defense contractors with smaller, pure-play space companies. That mix brings some stability from established firms and captures growth from emerging space ventures.
Analysts say the space economy might top $1 trillion by 2030. Satellite internet and commercial launch services seem to be the big drivers here.
Private companies are stepping up, challenging government space programs and opening up fresh investment opportunities. That’s something I find pretty exciting, honestly.
People keep needing more satellite communications as the world gets more connected—even in places you’d never expect. Plus, companies have slashed launch costs, so space-based services are finally starting to make sense for commercial applications.
Space tourism and asteroid mining could shake things up even more. Still, those sectors feel a bit out there right now, and nobody can say for sure when—or if—they’ll turn a profit.
