Space ETFs are ditching old-school rockets

The space trade got a makeover

The space ETF aisle is having a bit of an identity crisis — in a good way. Instead of stuffing portfolios with the usual aerospace-and-defense giants, fund issuers are leaning harder into the companies building the commercial space economy: satellite networks, reusable launch, direct-to-device connectivity, and data services.

That matters because the business is getting bigger, faster. The article points to 2025’s record 296 launches and 4,434 satellites deployed, plus commercial satellite activity generating $303 billion in revenue. In other words: this isn’t just rocket cosplay anymore.

Old space vs. new space

Traditional space funds have often looked a lot like defense-adjacent baskets with a few shiny newcomers sprinkled on top. The First Trust Bloomberg Space Economy ETF still has more than half its portfolio in aerospace and defense names, while funds like Procure Space have holdings ranging from Garmin and Trimble to Viasat, Planet Labs, Rocket Lab, and AST SpaceMobile.

The punchline: the economics of “old space” and “new space” are diverging. Old space is all giant contracts and slow build cycles. New space is trying to be the Stripe, not the Boeing, of the sky.

ETF issuers are chasing the trend

The newest funds are getting more selective, not less. Tema’s Space Innovators ETF is pitching itself as a pure-play on the modern space economy, while Roundhill’s Space & Technology ETF and Seraphim’s new UCITS ETF are narrowing the lens even further around companies with real space infrastructure and technology exposure.

That leaves investors with a very different menu than the one that existed a few years ago:

• more satellite broadband
• more Earth-observation data
• more direct-to-device connectivity
• more launch and communications infrastructure
• less “everything aerospace, all at once”

Why you should care

If the space economy keeps compounding the way the article suggests, the winners may not be the obvious rocket-launch headline grabbers. They might be the picks-and-shovels players — the ones selling connectivity, positioning, analytics, and the infrastructure behind the hype.

Big picture: the space trade is maturing from “cool rockets” to “actual recurring revenue,” and ETFs are finally adjusting their playlists accordingly.