Space for Everyone: How to Invest in the Cosmos Without Betting on One Billionaire
The space economy is booming, but for many of us, buying shares in a single private company like SpaceX feels out of reach or ethically complicated. The good news? You don't need to bet on one billionaire's vision to get a piece of the cosmic pie. Exchange-traded funds (ETFs) offer a way to invest in the future of space exploration while spreading risk and aligning with broader societal values.
McKinsey predicts the global space economy will grow from $630 billion in 2023 to $1.79 trillion by 2035. That's a lot of potential for innovation, jobs, and even climate monitoring. But how do you get in without putting all your eggs in one rocket? Here are three ETFs that offer diversified exposure to the space economy, with a critical look at their performance and fees.
Why Not Just Buy SpaceX?
SpaceX is the undisputed giant of the space industry, with direct stakes in rockets and satellite networks. But it's a private company, meaning you can't just buy shares on the stock market. Even if you could, putting all your money into one company is risky. ETFs let you own a piece of many companies, including SpaceX, Rocket Lab, and others, without the single-point-of-failure risk.
Three ETFs to Watch
1. Tema Space Innovators ETF (NASA)
This fund is designed to capture the full arc of space growth. It holds a diversified basket of publicly traded space stocks, including SpaceX and Rocket Lab, and even a handful of pre-IPO companies not yet available to the public. The 0.75% expense ratio is on the high side, but you're paying for active management and early access. Since its launch, however, the fund has posted negative returns, so caveat emptor.
2. Procure Space ETF (UFO)
With a clever ticker and a mission to look beyond Earth, this ETF tracks the VettaFi Space index. It's an index fund, meaning it passively follows a set of space-related stocks. The 0.75% expense ratio feels steep for a passive fund, especially since it only holds publicly traded assets. Performance has been market-lagging, so it's a bet on the sector's future, not a short-term winner.
3. ARK Space & Defense Innovation ETF (ARKX)
Managed by ARK Invest and led by growth investor Cathie Wood, this fund blends space stocks with defense innovation. It focuses on seven areas: autonomous mobility, intelligent devices, advanced batteries, 3D printing, reusable rockets, adaptive robotics, and neural networks. The 0.75% expense ratio has been a drag on returns. Since its 2021 launch, it has delivered about 45% in returns, roughly half of the S&P 500. That's a tough sell for a fund that charges a premium.
The Bottom Line: Is It Worth It?
None of these funds have outperformed broad market indexes like the S&P 500 over the long term. The Tema ETF has negative returns since inception. The Procure fund lags the market. The ARK fund, despite its flashy focus, has underperformed. High fees eat into returns, and the space sector is still volatile and speculative.
For most investors, low-cost broad market index funds remain the smarter long-term play. But if you're passionate about the space economy and want to support innovation without betting on a single billionaire, these ETFs offer a way to diversify your bet. Just go in with your eyes open: the cosmos is exciting, but it's not a guaranteed path to riches.
As always, do your own research and consider your risk tolerance. The stars are calling, but your financial future should stay grounded.