Stock Pick of the Week (5/18)
Overview
The Procure Space ETF (UFO) gives investors a single ticket entry into the space sector and its economy. The ETF, launched in 2019, includes companies present in satellite telecommunications, rocket development, earth observation, lunar exploration, and more. The companies include many recently notable names in the space industry, such as Rocket Lab Corp (RKLB), Planet Labs PBC (PL), and Intuitive Machines Inc (LUNR). UFO’s portfolio is notable for being more international than its peers, with US exposure being about 71% and the rest of the fund allocated to Japan, Canada, and the Netherlands, allowing investors to tap into the combined strength of component suppliers in Japan and satellite operators from Europe.
The Space Play
UFO has gained roughly 41% YTD, compared to the S&P 500’s gain of about 8% over the same period. While the recent boom might make some investors wary, the fund's blend of speculative new plays like AST SpaceMobile and Rocket Lab, combined with solidified anchors like Boeing, Honeywell, and Lockheed Martin, could make it a great long-term hold. The fund has climbed consistently over the past year, up 132% since May of 2025. While there is strong success, it's important that investors brace for near-term bumps, as this pick is not for the faint of heart. Many of UFO’s top holdings are still burning cash and posting negative FCFs.
The SpaceX Effect
The team here at CFR is no stranger to the recent buzz around the SpaceX IPO. In recent news, a more specific June 12th listing on the NASDAQ has been targeted (Reuters). While SpaceX itself won’t be in UFO’s portfolio on day one, the IPO’s halo effect on the space sector is already being felt around the industry. When a company like SpaceX goes public, every comparable name stands to benefit from the repricing of the sector's growth narrative, and with an ETF that encompasses a majority of the sector, investors are setting themselves up to maximize return.
Why-to-Buy
We want to reiterate that UFO is targeted at investors willing to take on more risk in their portfolios. It's a concentrated bet on an industry in the middle of a pivotal transition. There will most likely be turbulence, and it could take some serious stomaching from investors. Yet with the SpaceX IPO poised to reshape how the market values space companies and with a balance of both risky and safe holdings within the industry, UFO is CFR’s pick of the week!