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Space vs. Aerospace & Defense: Which Deserves a Spot in Your Portfolio?
Thousands of investors just got in on SpaceX*, but they’re missing out on the bigger picture. The space industry beyond SpaceX we believe has the diversification and commercial upside to compete with traditional aerospace investments in portfolios across the board.
SpaceX’s initial public offering on June 12th, 2026 raised nearly $75 billion1 with a valuation of $1.8 trillion,2 a figure that many still cannot fathom. While SpaceX brought attention to the space industry, evaluating investment in space through SpaceX alone is grossly misleading. Investors who focus on just SpaceX are skipping the actual comparison that may put space ahead of classic aerospace and defense (A&D) investments: revenue dependence and what that means for an investor’s exposure.
Throughout the A&D industry, government reliance provides the risk of a singular revenue stream. In FY2025, U.S. government customers accounted for approximately 72% of Lockheed Martin’s* consolidated sales.3 Northrop Grumman’s* government-concentrated sales are historically cited around 95% to 98%.4 Investors should not ignore this massive concentration risk. Lockheed Martin’s own FY2024 10-K filing admits that any decision by the U.S. or other allied governments to cut spending would have an adverse impact on the company’s business.5 This is not a hypothetical situation. During the Federal government’s shutdown in 2025, General Dynamics* was forced to enter the commercial paper market to cover non-payment issues.6
SpaceX, in a way, faces this same risk as a leading player in the space industry. What sets SpaceX apart from the A&D majors is the scale of its commercial revenue: its Starlink business alone generated $11.4 billion in 20258 — about 61% of the company’s roughly $18.7 billion in total revenue — which offsets its government dependency.7
The key factor that investors have missed in comparing space and A&D is that space generates about 78% of its revenues from commercial applications and only 22% from governments.9
The Procure Space ETF® (ticker: UFO) demonstrates the diversity of the space industry. As the first pure-play space exchange-traded fund, its holdings include rocket and satellite manufacturers, as well as other space-related communications and industrial firms:
How UFO’s holdings break down across industry sectors.10
As of June 30, 2026
The Procure Space ETF® is a more complete visualization of what the space industry really is, much more commercialized and innovative rather than federally reliant. To capture the breadth of the industry, UFO has grown from 30 holdings to 64 as of June 2026,10 and its assets under management grew from $33 million to over $1 billion between the end of 2024 and May 2026.11
A McKinsey & Company report estimates the global space economy to reach $1.8 trillion by 2035, up from $630 billion in 2023.12 This is nearly twice the projected rate of global GDP growth and is just the beginning.
UFO’s pure play, diversified constituent base means no single company, including SpaceX itself, drives the fund’s performance. While space stocks broadly saw volatility around SpaceX’s June IPO, UFO’s construction spreads that exposure across dozens of companies rather than concentrating it in one name.
As of June 30, 2026, UFO’s year to date NAV Return was 31.76% and Market Value Return was 31.25%.13
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Funds may be lower or higher than the performance quoted. All performance is historical and includes reinvestment of dividends and capital gains. Performance data current to the most recent month end may be obtained by calling 866-690-ETFS (3837).
The comparison between space and A&D is one of diversification and investor exposure. Investors with different needs and tolerances may pursue one sector or another. Regardless, it seems like space is destined for the stars.
*As of July 14, 2026, Space Exploration Technologies Corp (SPCX) was a 4.70% holding, Northrop Grumman Corp (NOC) was a 2.68% holding, Lockheed Martin Corp (LMT) was a 2.62% holding, and General Dynamics Corp (GD) was a 0.00% holding in the Procure Space ETF® (NASDAQ: UFO).
For a complete list of holdings in UFO, visit: https://procureetfs.com/ufo/. Fund holdings and sector allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security.
Please consider the Fund’s investment objectives, risks, and charges and expenses carefully before you invest. This and other important information is contained in the Fund’s summary prospectus and prospectus, which can be obtained by visiting procureetfs.com. Read carefully before you invest.
Investing involves risk. Principal loss is possible. The Fund is also subject to the following risks: Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the funds. Brokerage commissions will reduce returns.
Aerospace and defense companies can be significantly affected by government aerospace and defense regulation and spending policies. The exploration of space by private industry and the harvesting of space assets is a business based in future and is witnessing new entrants into the market. Investments in the Fund will be riskier than traditional investments in established industry sectors. The Fund is considered to be concentrated in securities of companies that operate or utilize satellites which are subject to manufacturing delays, launch delays or failures, and operational and environmental risks that could limit their ability to utilize the satellites needed to deliver services to customers. Investing in foreign securities are volatile, harder to price, and less liquid than U.S. securities. Securities of small- and mid-capitalization companies may experience much more price volatility, greater spreads between their bid and ask prices and significantly lower trading volumes than securities issued by large, more established companies. The Fund is not actively managed so it would not take defensive positions in declining markets unless such positions are reflected in the underlying index. Please refer to the summary prospectus for a more detailed explanation of the Funds’ principal risks. It is not possible to invest in an index.
UFO is distributed by Quasar Distributors LLC.
By ProcureAM Research
American companies are doing some of the most exciting work in space today, and a remarkable number of them are in one place, the Procure Space ETF® (NASDAQ: UFO). UFO is the world’s first pure-play exchange-traded fund focused on the global space economy. It holds U.S. names spanning launch, satellites, lunar landers, and aerospace. As the country marks its 250th birthday this Fourth of July, it is a fitting moment to meet some of the American companies inside the fund.
The new pioneers. A generation of American companies is doing the early, uncertain work of making space routine. SpaceX* builds and launches reusable rockets. Rocket Lab* builds and launches its own spacecrafts. Planet Labs* operates Earth-imaging satellites. Firefly Aerospace* and Intuitive Machines* are both reaching for the Moon, AST SpaceMobile* is working to connect everyday phones directly to satellites, and Redwire* builds the hardware and infrastructure other space companies rely on. Most of them did not exist a generation ago.
The established builders. The names behind American aerospace are here too. Boeing*, Lockheed Martin*, and Northrop Grumman* carry decades of engineering experience. They provided the institutional backbone that helped turn space from a national ambition into a working industry.
The connectivity layer. Much of space is delivered on the ground. Iridium Communications* and Globalstar* keep aircraft, ships, and remote regions connected, and Trimble* turns satellite positioning into precision tools for farming, construction, and surveying. It is the quiet layer most people use without noticing.
Chasing the next frontier has always been part of the American spirit. We are proud the Procure Space ETF® holds the American companies highlighted above along with many others. Happy Fourth of July!
To learn more about the space companies found within the Procure Space ETF® (NASDAQ: UFO), please visit www.ProcureETFs.com.
Important Information
*As of June 17, 2026, SpaceX (SPCX) was a 6.17% holding, Rocket Lab (RKLB) was a 5.03% holding, Trimble (TRMB) was a 4.96% holding, AST SpaceMobile (ASTS) was a 4.91% holding, Planet Labs (PL) was a 4.46% holding, Globalstar (GSAT) was a 3.04% holding, Iridium Communications (IRDM) was a 2.92% holding, Boeing (BA) was a 2.56% holding, Northrop Grumman (NOC) was a 2.46% holding, Lockheed Martin (LMT) was a 2.44% holding, Firefly Aerospace (FLY) was a 2.41% holding, Intuitive Machines (LUNR) was a 2.20% holding, Redwire (RDW) was a 1.86% holding in the Procure Space ETF® (NASDAQ: UFO).
For a complete list of holdings in UFO, visit: https://procureetfs.com/ufo/. Fund holdings and sector allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security.
Please consider the Fund’s investment objectives, risks, and charges and expenses carefully before you invest. This and other important information is contained in the Fund’s summary prospectus and prospectus, which can be obtained by visiting procureetfs.com. Read carefully before you invest.
Investing involves risk. Principal loss is possible. The Fund is also subject to the following risks: Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the funds. Brokerage commissions will reduce returns.
Aerospace and defense companies can be significantly affected by government aerospace and defense regulation and spending policies. The exploration of space by private industry and the harvesting of space assets is a business based in future and is witnessing new entrants into the market. Investments in the Fund will be riskier than traditional investments in established industry sectors. The Fund is considered to be concentrated in securities of companies that operate or utilize satellites which are subject to manufacturing delays, launch delays or failures, and operational and environmental risks that could limit their ability to utilize the satellites needed to deliver services to customers. Investing in foreign securities are volatile, harder to price, and less liquid than U.S. securities. Securities of small- and mid-capitalization companies may experience much more price volatility, greater spreads between their bid and ask prices and significantly lower trading volumes than securities issued by large, more established companies. The Fund is not actively managed so it would not take defensive positions in declining markets unless such positions are reflected in the underlying index. Please refer to the summary prospectus for a more detailed explanation of the Funds’ principal risks. It is not possible to invest in an index.
UFO is distributed by Quasar Distributors LLC.
