The Space (ETF) Race: UFO, ROKT and ARKX

The blossoming space industry already has prompted a handful of space-themed ETFs. But UFO, ROKT and ARKX are three distinctly different products.

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Space: the final investing frontier?

Hokey one-liners aside, private space travel, exploration and operation is one of the smallest and youngest industries we have left to invest in. Even if you're being generous, space-adjacent plays number in the dozens, and you've likely got the requisite fingers to count the pure plays. Yet investor interest is robust enough that a cottage industry of space ETFs has popped up over the past couple of years.

It's a growth market, to be sure. In a 2020 note, Morgan Stanley estimates "the global space industry could generate revenue of more than $1 trillion or more in 2040, up from $350 billion currently." And most of that will find its way into a number of larger existing sectors and industries.

"Near term, space as an investment theme is also likely to impact a number of industries beyond Aerospace & Defense, such as IT Hardware and Telecom sectors," Morgan Stanley says. "Yet, the most significant short- and medium-term opportunities may come from satellite broadband Internet access."

Satellite broadband will represent 50% of the projected growth of the global space economy by 2040 – and as much as 70% in the most bullish scenario, Morgan Stanley says. It adds that launching satellites that offer broadband Internet service will help to drive down the cost of data, just as demand for that data explodes.

Although you could try to take a ride to the moon on an individual play or two, several space ETFs have cobbled together what they believe will be the beneficiaries of humanity's growing movement toward the stars. Here, we explore the three main players: products from Procure and SPDR, as well as the new ARK Invest space ETF.

Data is as of March 29.

Kyle Woodley
Senior Investing Editor, Kiplinger.com

Kyle is senior investing editor for Kiplinger.com. As a writer and columnist, he also specializes in exchange-traded funds. He joined Kiplinger in September 2017 after spending six years at InvestorPlace.com, where he managed the editorial staff. His work has appeared in several outlets, including U.S. News & World Report and MSN Money, he has appeared as a guest on Fox Business Network and Money Radio, and he has been quoted in MarketWatch, Vice and Univision, among other outlets. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.