Procure Space ETF (UFO) delivered solid gains last year and can do it again this year.

A SpaceX IPO with 93% probability by December 31, 2026, could reshape UFO’s portfolio through eventual index inclusion at a potentially massive weight.

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UFO returned 66.36% in 2025 while the S&P 500 gained a fourth of that. With a SpaceX IPO looking increasingly likely before year-end, the question is whether the fund can repeat that performance in 2026 — and whether investors understand what they're actually buying.

Procure Space ETF (NYSEARCA:UFO) tracks the S-Network Space Index, a benchmark capturing companies that derive meaningful revenue from space-related activities. The fund launched in April 2019 and carries an expense ratio of 0.94% on $360 million in assets. Its dividend yield is 0.4%, so this is a capital appreciation vehicle, not an income play.

The portfolio centers on two primary sectors: Industrials at 51% and Media & Communications at 372. Those categories cover satellite operators, launch companies, space infrastructure builders, and defense contractors with space exposure. Largest positions include Planet Labs (NYSE:PL) at 5.8%, MDA Space at 5.6%, among other space stocks. Traditional defense names like Lockheed Martin (NYSE:LMT), Northrop Grumman (NYSE:NOC), and RTX (NYSE:RTX) round out the lower-weight holdings, blending pure-play space bets with larger aerospace anchors.

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Procure Holdings' CEO said this is "the only pure-play space ETF" in the U.S., unlike ETFs that blend in broader defense and adjacent technology exposure.

SpaceX does not currently sit inside UFO's portfolio. The company remains private as of March 30, 2026, so the fund holds no direct SpaceX exposure today. The catalyst story runs through two channels: the halo effect on existing holdings and the eventual inclusion of SpaceX shares after a listing.

Prediction markets are pricing a high probability of a 2026 IPO. Traders on Polymarket assign a 52% implied probability that SpaceX goes public by June 30, 2026, and 93% by December 31, 2026.

Moreover, reports show SpaceX could file its IPO prospectus with the SEC imminently, potentially raising over $75 billion at a $1.75 trillion valuation. That filing speculation alone moved the sector: Rocket Lab (NASDAQ:RKLB) jumped when the reports surfaced, and AST SpaceMobile (NASDAQ:ASTS) saw similar gains that session.

Once SpaceX is publicly traded, the S-Network Space Index methodology would evaluate it for inclusion. Given SpaceX's scale in launch services, Starlink broadband, and space infrastructure, it would almost certainly qualify at a weighting that could reshape the fund's character entirely.

UFO has delivered real results, and the fund is up 103% over the past year and has gained 11% year-to-date in 2026 through late March.

The "double again" thesis is not guaranteed. Much of 2025's momentum is now priced into the holdings. Rocket Lab and AST SpaceMobile have each pulled back sharply in recent weeks. That said, a successful SpaceX IPO will certainly make UFO surge by at least the mid-double digits.

Concentration in speculative names: Pure-play space companies like Planet Labs and AST SpaceMobile carry high valuations relative to current revenues. When sentiment shifts, these names drop fast. The fund's recent one-week decline of 2.65% came even as the SpaceX IPO narrative remained intact.

No direct SpaceX exposure yet: The entire "SpaceX IPO" catalyst is currently a proxy trade. Investors are buying adjacent companies and hoping the halo effect and eventual index inclusion deliver returns. If the IPO is delayed beyond 2026 or disappoints, the thesis loses its primary engine.

Execution timing risk: Prediction markets are probabilities, not guarantees. Regulatory review and Starship milestones remain variables that could push the timeline out.

This is a high-conviction growth vehicle if you want to bet on the commercialization of space as a multi-year theme. UFO gives you a concentrated basket of early-stage and mid-cap space companies.

That said, the fund's path depends heavily on whether SpaceX actually crosses the IPO finish line this year. The recent volatility in key holdings shows how quickly the thesis can be tested.

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