Quick Answer:
The best space ETF for you ultimately depends on how directly you want to invest in the space economy. Let’s be real here. UFO is one of the most direct space-focused choices you can make. Meanwhile, ARKX combines space with defense and other innovation themes. ROKT adds a broader frontier-technology angle that includes deep-sea exploration. On the flip side, XAR and ITA are better understood as traditional aerospace-and-defense ETFs rather than pure space funds.
For investors comparing these funds, the most important differences are not simply recent performance metrics. Multiple factors can materially change your risk profile. You must evaluate expense ratios, portfolio construction, and concentration. Exposure to private companies, defense exposure, and commercial space dependency also matter greatly. In this high-stakes niche, looking strictly at a trailing chart is a rookie mistake. The real devil is hiding in how the index is weighted.
When I first started researching this niche for Orbit Investor, I found it incredibly frustrating how many funds slap the word “Space” in their name. In reality, they are just buying legacy defense contractors. It felt like a marketing trap. That is why I wrote this guide. My goal is to separate the real cosmic plays from the standard aerospace giants and make sure your capital actually rides the 2026 commercial space boom.
1. UFO: Procure Space ETF
UFO is undoubtedly one of the clearest choices for investors who are specifically looking for a pure space-themed ETF. The fund tracks the VettaFi Space Index and is carefully designed to provide direct exposure to companies actually participating in the space economy. That makes it particularly relevant for investors who want a genuine thematic allocation rather than just another broad aerospace-and-defense portfolio.
Fees and fund profile
On the cost side, UFO had an expense ratio of 0.75% as of the latest fund data used for this article. While that is definitely on the pricier side for a thematic fund, it is the cost of getting pure exposure. The ETF launched on April 11, 2019, trades on Nasdaq, and currently balances a basket of 68 holdings. Net assets were approximately $549.9 million as of September 24, 2026. You can track how these total assets under management change daily on the official Yahoo Finance UFO Holdings Page. This volume shows that despite the niche market, it still maintains decent liquidity for everyday traders.
Top holdings
A closer look under the hood reveals the top weights as of September 25, 2026. Space Exploration Technologies Corp. (SpaceX) heavily dominates the fund at 14.60%. Rocket Lab follows at 5.56%, Garmin takes 5.07%, and high-conviction plays like AST SpaceMobile sit at 4.77%.
Trimble accounts for 4.75%, Viasat at 4.65%, EchoStar at 4.60%, Sirius XM at 4.31%, Planet Labs at 3.50%, and finally, MDA Space at 3.30%. You can audit these exact asset distributions transparently on the Morningstar UFO Portfolio Profile. Seeing SpaceX take up such a massive chunk makes it clear that this ETF’s performance links directly to Elon Musk’s launch cadence rather than just legacy satellite infrastructure.
Performance
Through August 31, 2026, UFO’s NAV total return clocked in at 13.16% year to date and 28.86% over one year. On the other side of the ledger, the market-value returns were 12.99% year to date and 29.16% over one year. This tight tracking shows that liquidity remains solid for investors trying to time their entries.
Who is UFO best for?
UFO is most appropriate for an investor who wants a more direct exposure to the commercial space theme. You just have to accept the reality that a thematic ETF can be significantly more concentrated and volatile than a broad-market index fund.
To be completely transparent, a 0.75% expense ratio is usually a dealbreaker for my personal portfolio. However, this fund stands as one of the very few ways to get double-digit exposure to SpaceX and Rocket Lab in a single basket. That is why I still keep it on my active watchlist for tactical tech allocations whenever the sector dips.
2. ARKX: ARK Space & Defense Innovation ETF
ARKX is an actively managed ETF. Make no mistake, it is significantly broader than its original space-only branding might suggest. Effective November 23, 2025, the fund changed its name from ARK Space Exploration & Innovation ETF to ARK Space & Defense Innovation ETF. Management also officially revised the fund’s mandate. The new strategy allocates at least 80% of assets to space and defense innovation equities.
This pivot basically confirmed what many of us suspected. Pure space plays are simply hard to come by. Because of this, active managers must blend orbital ambitions with down-to-earth military contracts.
Fees and fund profile
ARKX had an expense ratio of 0.75%. For an actively managed fund, this pricing is pretty standard, though it still demands a high performance to justify the premium. ARK describes a typical portfolio of approximately 35 to 55 holdings. You can verify their current management strategy directly on the official ARKX Space & Defense Innovation ETF profile. Net assets were about $759.5 million as of July 31, 2026, proving that Cathie Wood’s ecosystem still commands significant asset scale despite changing market regimes.
Top holdings
Peeking at the allocation layout, as of September 4, 2026, notable holdings included SpaceX at 10.60%, L3Harris at 6.70%, Kratos at 6.07%, and a surprising agricultural heavyweight like Deere at 5.70%. The middle tier features Rocket Lab at 5.08%, Amazon at 4.59%, NVIDIA at 4.46%, AeroVironment at 4.22%, Alphabet at 3.91%, and finally AMD at 3.88%. Seeing giants like Deere and NVIDIA alongside rockets shows that Cathie Wood is betting heavily on automation and data processing infrastructure rather than just physical launchpads.
Performance
For a comparable August 31, 2026 snapshot, ARKX was approximately 12.0% higher on a NAV year-to-date basis and approximately 23.6% higher over one year. Keep in mind that ARKX’s results can differ materially from a pure space ETF because its portfolio deliberately includes defense, technology, industrial and other innovation exposures. This multi-sector mix inevitably smooths out the wild price swings, but it also dilutes your raw upside when pure space plays rocket higher.
Who is ARKX best for?
ARKX may suit investors who want space exposure in their portfolio but also want a broader strategy built around innovation and defense rather than a narrowly defined and inherently volatile space-economy basket. If you prefer having established defense moats alongside speculative rocket startups, this blended approach makes a lot of sense.
3. ROKT: SPDR S&P Kensho Final Frontiers ETF
ROKT is often included in space-ETF discussions, but it is absolutely vital to understand what the fund actually owns. The ETF combines cutting-edge exposure to outer-space technologies with deep-sea exploration. Investors can evaluate and track the fund’s asset metrics directly on State Street’s official SPDR S&P Kensho Final Frontiers ETF overview. It therefore should not be treated as a pure-play space fund, but rather as a dual bet on the two most extreme and unexplored frontiers of human engineering.
Fees and fund profile
When it comes to costs, ROKT had an expense ratio of 0.45% and an inception date of October 22, 2018. This price point makes it significantly cheaper than its main peers, which is a massive plus for long-term holding. The fund held 37 securities as of October 2, 2026, meaning you are getting a highly concentrated basket of assets.
Top holdings
Digging into the asset allocation, as of October 2, 2026, notable holdings included Forum Energy Technologies at 4.53%, Ducommun at 3.93%, and deep-sea engineering play Oceaneering at 3.89%. The rest of the top concentration features Iridium at 3.71%, RTX at 3.59%, Moog at 3.55%, Teledyne at 3.54%, Lockheed Martin at 3.33%, Hexcel at 3.26%, and finally HEICO at 3.25%. Seeing subsea oilfield service firms mixed right alongside aerospace titans confirms that this fund splits its bets between the ocean floor and low Earth orbit.
Performance
Through August 31, 2026, ROKT posted a massive 29.63% on a NAV year-to-date basis and an impressive 54.24% over one year. Looking at the longer-term horizon, its three-year annualized return was 38.27%, while its five-year annualized return steadied at 22.48%. These blistering numbers make it the clear performance leader of the group for this timeframe, proving that blending marine robotics with aerospace tech has paid off handsomely.
Who is ROKT best for?
ROKT is undoubtedly better suited to investors who genuinely like the broader frontier-technology concept and do not require a portfolio to be exclusively tied to space. If you are comfortable backing deep-sea robotics alongside satellite networks to capture raw engineering innovation, this cheaper alternative hits the sweet spot.
4. XAR: SPDR S&P Aerospace & Defense ETF
XAR is by no means a dedicated space ETF. It is first and foremost an aerospace-and-defense ETF that can provide indirect exposure to companies participating in the space economy. Its modified equal-weight approach is a great feature because it gives investors exposure across large-, mid-, and small-cap companies instead of just favoring the mega-caps. The full list of allocations is published and updated on the official SPDR S&P Aerospace & Defense ETF documentation. Choosing this fund means you are essentially betting on pent-up defense spending rather than a pure orbital expansion.
Fees and fund profile
XAR had an expense ratio of 0.35%, an inception date of September 28, 2011, and carried a lean basket of 50 holdings as of September 22, 2026. This ultra-low fee makes it an incredibly efficient core holding if you want industrial exposure without high costs.
Top holdings
A quick look at the weightings shows that its leading positions included Rocket Lab at 3.29%, Honeywell Aerospace at 3.18%, AeroVironment at 3.14%, and aviation plays like FTAI Aviation at 2.95%. The top ten is rounded out by Kratos at 2.90%, Moog at 2.88%, Lockheed Martin at 2.87%, Northrop Grumman at 2.85%, TransDigm at 2.85%, and HEICO at 2.84%. Because of the equal-weight methodology, a pure space stock like Rocket Lab actually gets a fair fight against legacy military contractors.
Performance
Through August 31, 2026, XAR captured a return of 6.57% year to date and 18.33% over one year. Stepping back to look at the longer-term trend, its three-year annualized return was 28.79%, and its five-year annualized return landed at 16.51%. These steady single and double-digit metrics show exactly why investors flock to this fund for stable aerospace growth rather than highly speculative rocket bets.
Who is XAR best for?
XAR may be a better fit for investors who fundamentally want aerospace and defense exposure with a lower expense ratio and broader industry diversification than a highly volatile, narrowly focused space ETF. It is the ideal sandbox for defensive investors who like their orbital growth backed by rock-solid Pentagon budgets.
5. ITA: iShares U.S. Aerospace & Defense ETF
ITA is another broad aerospace-and-defense ETF rather than a pure space fund. Make no mistake, its portfolio is heavily exposed to major U.S. aerospace and defense companies. For historical performance comparisons, you can audit the fund metrics directly on BlackRock’s official iShares U.S. Aerospace & Defense ETF product page. Opting for this ticker means you are buying into heavily consolidated, old-school defense infrastructure rather than a speculative lunar economy.
Fees and fund profile
When assessing the costs, ITA had an expense ratio of 0.37%, launched on May 1, 2006, and held a targeted basket of 50 securities as of October 2, 2026. This sub-0.40% fee makes it a highly efficient vehicle for buy-and-hold investors looking to park capital long-term without heavy management friction.
Top holdings
A quick glance at the allocations shows that as of October 2, 2026, major holdings included GE Aerospace at 20.73%, RTX at 16.06%, and Boeing at 7.77%. The next tier features Howmet Aerospace at 4.70%, TransDigm at 4.58%, Lockheed Martin at 4.55%, General Dynamics at 4.42%, and Northrop Grumman at 4.38%. With GE and RTX anchoring over a third of the fund, this is heavily skewed toward commercial aviation giants rather than pure rocket launchpads.
Performance
Through August 31, 2026, ITA comfortably returned 13.18% year to date and 29.30% over one year. If we map out the longer-term track record, its three-year cumulative total return was 112.44%, its five-year cumulative return was 130.52%, and its ten-year cumulative return reached an outstanding 329.29%.
Because performance can move substantially in a short period, these figures should always be labeled with their measurement date. For example, reported year-to-date NAV performance had changed materially by October 1, 2026. This volatility is exactly why timing an entry in this capital-heavy industry requires looking at precise, dated data points rather than general trends.
Who is ITA best for?
ITA is clearly a better fit for an investor who wants broad U.S. aerospace-and-defense exposure and is less concerned about owning companies specifically tied to the volatile commercial space sector. If your main goal is backing steady military contracts and global commercial aviation rather than speculative rockets, this vehicle offers the safety net you are looking for.
How Do These ETFs Compare?
Let’s face it: there is no single best space ETF for every investor. The key question you need to ask yourself is what you actually mean by ‘space exposure.’ UFO is arguably the most straightforward thematic choice in this group. ARKX adds active management and a broader innovation-and-defense mandate to the mix. ROKT is a frontier-technology fund that curiously includes deep-sea exposure, while XAR and ITA are broader, traditional aerospace-and-defense funds.
Expense ratios also matter tremendously. XAR is the cheapest of the five at 0.35%, followed closely by ITA at 0.37%, ROKT at 0.45%, and UFO and ARKX tied at a steeper 0.75%. A higher expense ratio is not automatically a reason to reject a fund, but the investor should understand exactly what additional exposure or portfolio construction they are receiving in return for that premium.
Do Space ETFs Own SpaceX?
This is honestly one of the most important distinctions for investors researching this niche. Some funds can hold private companies such as SpaceX through eligible investment structures, while others simply cannot or do not. UFO and ARKX both had direct SpaceX exposure in the holdings data used for this article, with UFO at 14.60% and ARKX at 10.60% as of the respective September 2026 reporting dates. Seeing Elon Musk’s giant taking up double-digit weights in these funds changes the game entirely.
Investors should not assume that every ETF described as a ‘space ETF’ owns SpaceX. Always check the latest holdings file from the fund issuer before investing your hard-earned capital.
You can read here how to buy Space X Stock
Space ETFs vs. Individual Space Stocks
Buying individual space stocks can provide much more concentrated exposure to a particular company, technology, or business model. Let’s be real here: that concentration can create larger gains when a company executes well, but it can also create substantially larger losses when a company unexpectedly misses expectations. To navigate this volatility, it helps to know which public firms actually back these multi-year revenues, as I heavily researched in my recent breakdown of the best space stocks to buy now.
An ETF spreads this company-specific risk across a basket of holdings. The trade-off, however, is that an ETF may dilute the impact of a single successful company, and some holdings may have only a limited relationship with commercial space.
For a long-term investor building a diversified portfolio, the more useful question is often not ‘Which space stock will win?’ but ‘How much thematic exposure, if any, belongs alongside my core portfolio?’ Keeping these volatile cosmic bets capped at a small percentage of your total capital is usually the safest way to capture the upside without taking on too much overnight risk.
Space ETFs vs. the S&P 500
The S&P 500 remains a fundamentally different investment from a thematic space ETF. It provides exposure to approximately 500 leading U.S. companies across many industries, whereas a space or aerospace ETF deliberately concentrates on a narrower theme. In essence, you are choosing between betting on the entire American economy or a single high-tech vertical.
As of August 31, 2026, the S&P 500 had a 12.28% year-to-date price return and an 18.98% one-year price return. These figures are highly useful as a benchmark, but they should not be blindly compared with an ETF’s total return without checking that the measurement conventions are consistent. Mixing price returns with total returns is a classic mistake that will distort your data. In fact, I recently shared how easily these numbers get misinterpreted during my own one-year S&P 500 investment journey.
For many investors, a thematic ETF can therefore make more sense as a satellite allocation around a diversified core portfolio rather than as a replacement for broad-market exposure. Using these niche funds to spice up your returns rather than to anchor your life savings is usually the most logical path forward.
Key Risks to Consider Before Buying a Space ETF
Concentration risk: Thematic funds can be significantly more concentrated than broad-market ETFs. A few holdings or industries may have an outsized and sometimes painful effect on results.
Valuation risk: Excitement around space, AI, defense, or other innovation themes can easily push valuations higher than underlying business fundamentals justify. Buying at the absolute peak of a hype cycle rarely ends well.
Volatility: Space-related companies can be incredibly sensitive to contract wins, launch outcomes, financing conditions, regulation, and changing investor sentiment. A single failed rocket launch can wipe out millions in market value overnight.
Private-company exposure: An ETF holding a private company may value that position differently from a publicly traded security, and this underlying exposure can change over time.
Theme drift: Some funds marketed in space-investing discussions also own defense, industrial, technology, or deep-sea companies. You have to make sure you actually want what they are selling.
No guarantee of future returns: Strong historical performance does not establish that an ETF will outperform in the future. Treat past charts as a guide, not a promise for your 2026 portfolio.
How We Evaluated These ETFs
This comparison uses five criteria: thematic relevance, expense ratio, portfolio construction, holdings, and historical performance. Fund facts and holdings were checked against issuer materials where available. Performance figures are labeled by date because ETF returns change all the time.
The purpose of the ranking is educational, not to predict which fund will have the highest return. A lower-cost fund is not automatically better, and the ETF with the strongest recent performance is not automatically the best long-term choice. This is why digging past the surface level matters.
At the end of the day, navigating the space economy requires balancing real curiosity with strict portfolio discipline. Personally, I absolutely love tracking these aerospace milestones, but I always remind myself not to get blinded by the hype. Building a resilient financial core should always come first before throwing heavy capital into single-sector innovation trends.
Frequently Asked Questions
What is the best space ETF in 2026?
There is no universal best choice. UFO is arguably one of the most direct space-focused options, while ARKX offers a broader space-and-defense innovation approach. ROKT, XAR, and ITA provide progressively broader exposure outside pure commercial space. Your choice really boils down to how much defense company weight you are willing to swallow.
Which space ETF has the lowest expense ratio?
Among the five ETFs compared here, XAR has the lowest expense ratio at 0.35%, followed closely by ITA at 0.37%, ROKT at 0.45%, and UFO and ARKX at 0.75%. If minimizing fees is your main priority, the defense-heavy funds clearly win the cost battle.
Which ETFs own SpaceX?
UFO and ARKX both reported SpaceX exposure in the September 2026 holdings data used for this article. Holdings can and do change, so investors should definitely verify the latest fund data before investing.
Are space ETFs risky?
They can be. Space ETFs are generally more thematic and concentrated than broad-market index funds, and their holdings can be incredibly sensitive to valuation, technology, contracts, regulation, and investor sentiment. A single rocket setback can trigger massive swings in these smaller baskets.
Should I replace my S&P 500 ETF with a space ETF?
For most diversified investors, that is not the right way to frame the decision. A space ETF can be considered a satellite allocation around a diversified core, depending on risk tolerance, time horizon, and overall portfolio construction. Swapping a broad-market index for a niche theme is typically a gamble most long-term portfolios shouldn’t take.
The Bottom Line
Here is the unvarnished truth: there is no single shortcut to building a cosmic portfolio in 2026. If you want pure exposure to orbital infrastructure and next-gen launches, UFO remains the most straightforward vehicle, though you will have to pay a steep 0.75% premium for it. If you prefer your space tech backed by rock-solid Pentagon contracts, cheaper giants like XAR and ITA hit the sweet spot.
Ultimately, don’t let rocket hype blind your financial judgment. Treat these volatile space ETFs as small satellite allocations rather than the core foundation of your capital.
Disclaimer
This article is for informational and educational purposes only and is not personalized investment, financial, tax or legal advice. Nothing here is a recommendation or solicitation to buy or sell any security. All investing involves risk, including the possible loss of your entire investment, and past performance does not guarantee future results. Figures are approximate, are current as of October 13, 2026, and may change. Before making any investment decision, I strongly urge you to do your own research and consider speaking with a licensed financial professional.
Sources and Data
- VettaFi.com – VettaFi Space Index
- ProcureETFs.com – UFO – Procure Space ETF
- VettaFi.com – SPACE Factsheet
- Yahoo.com – Procure Space ETF (UFO) Holdings – Yahoo Finance
- Morningstar.com – Procure Space ETF (UFO) Portfolio
- Morningstar.com – Procure Space ETF (UFO) Performance
- SEC.gov – Procure ETF Trust II Annual Report for Period Ended July 31, 2026 (Form N-CSRS)
- ETF.com – ARKX – ARK Space Exploration & Innovation ETF
- ARK-Funds.com – ARKX – ARK Space Exploration & Innovation ETF Fund Page
- YCharts.com – ARK Space Exploration & Innovation ETF (ARKX) Total Assets Under Management
- StockAnalysis.com – ARK Space & Defense Innovation ETF (ARKX) Stock Price History
- SSGA.com – State Street SPDR S&P Kensho Final Frontiers ETF (ROKT)
- StockAnalysis.com – State Street SPDR S&P Kensho Final Frontiers ETF (ROKT) Overview
- Morningstar.com – SPDR® S&P Kensho Final Frontiers ETF (ROKT) Portfolio
- StockAnalysis.com – State Street SPDR S&P Aerospace & Defense ETF (XAR) Overview
- SSGA.com – State Street SPDR S&P Aerospace & Defense ETF (XAR)
- Morningstar.com – SPDR® S&P Aerospace & Defense ETF (XAR) Portfolio
- Morningstar.com – SPDR® S&P Aerospace & Defense ETF (XAR) Performance
- iShares.com – iShares U.S. Aerospace & Defense ETF (ITA)
- Morningstar.com – iShares U.S. Aerospace & Defense ETF (ITA) Portfolio
- Morningstar.com – iShares U.S. Aerospace & Defense ETF (ITA) Performance
- Yahoo.com – S&P 500 (^GSPC) Historical Data – Yahoo Finance
- Morningstar.com – S&P 500 Index (SPX) Performance
- ProcureETFs.com – UFO – Procure Space ETF Fact Sheet (As of June 30, 2026)
Written by L.Gomez · Last updated: October 20, 2026