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Vanda called the Procure Space ETF (UFO) the “standout favorite.”
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The Procure Space ETF hit record highs on Friday.
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Rocket Lab (RKLB), Planet Lab (PL) and Viasat (VSAT) are UFO’s top holdings.
Space-related stocks and ETFs are in vogue with retailers rushing to buy into the space trade ahead of the potential SpaceX IPO, according to Vanda.
Retail traders and mom-and-pop investors have bought space-related funds at the fastest rate since 2021, and Procure Space ETF (UFO) is the “standout favorite.”
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Vanda View on Space ETFs
“Retail investors are looking to get ahead of the widely anticipated SpaceX IPO,” Vanda wrote in a note accessed by CNBC. But, they’re doing so “in a selective way.”
Vanda also noted that investors have rushed into infrastructure stock Redwire (RDW), net buying a record of more than $25 million this week.
Redwire is a space infrastructure company that designs and builds critical space hardware, including solar arrays, deployable structures, and sensors utilized by government and commercial space stations.
RDW stock hit record highs on Friday and has gained for the third consecutive week, suggesting the strong interest in the stock as Elon Musk prepares to list SpaceX.
Morningstar View on Space ETFs
Space-focused ETFs have recently seen a significant surge, pulling in $1.3 billion in new capital over the past month, according to a Morningstar report. This influx has expanded the total assets under management for this emerging sector to $3.3 billion.
This growing investor interest is largely propelled by Elon Musk’s SpaceX and the emerging consensus that the space economy is on the cusp of substantial long-term expansion, anchored by Musk’s vision for Mars colonization.
The heightened retail and institutional interest comes amid reports that SpaceX is targeting a multi-trillion-dollar valuation for a market debut, which has effectively re-energized the broader sector. Industry experts note that while direct private placement in SpaceX remains restricted to accredited investors, the influx of capital into space ETFs reflects a growing appetite among everyday investors eager to secure a foothold in the rapidly evolving space economy.
“We tend to see this happen whenever something new and shiny appears on the scene,” said Bryan Armour, an ETF analyst at Morningstar to Reuters, referring to the proliferation of new products.
While UFO was launched in 2019, six more ETFs have joined in on the space economy bandwagon ever since. One of them, the $1.27 billion Tema Space Innovators ETF (NASA) which has accumulated more in assets in the seven weeks since its launch than the $972 million UFO has in the seven years since its debut, according to data from Morningstar Direct.
