UFO Turned a Forgotten Thesis Into 165% Returns While the S&P Gained 11%

UFO Turned a Forgotten Thesis Into 165% Returns While the S&P Gained 11% Austin Smith Wed, June 3, 2026 at 9:30 PM GMT+7 7 min read SPAX.PVT UFO SPY NVDA RKLB Quick Read UFO surged 165% over the trailing year, with 32% coming in April alone as SpaceX IPO speculation and $321 million in inflows flooded the fund. While SPY gained just 11% over the same window, UFO s basket trades above 100x earnings with 60% of holdings still pre-profit. Staying long UFO demands a 2026 SpaceX IPO at $1.5 trillion, DoD contract delivery, and Rocket Lab execution. Two failures would re-rate the basket. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Procure ETF Trust II Procure Space didn t make the cut. Grab the names FREE today. $10,000 parked in the Procure Space ETF (NYSEARCA:UFO) on May 29, 2025 at $24.64 was worth roughly $26,500 twelve months later, and most of that move happened in the last four months. UFO closed last Friday at $65.31, up 69% year to date and 165% over the trailing year. The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is up 11% YTD over the same window. Almost no one outside the small space-investing corner of the internet was talking about UFO until Benzinga ran a piece on May 29 noting the fund had just crossed $1 billion in AUM. Pick any window and UFO has been laundering risk into return. Year to date, the fund went from $38.65 on December 31, 2025 to $65.31 on May 29, 2026. One month alone, April 29 to May 29, the fund ran 32%. That last figure matters because it tells you the YTD number is not a January story. The bulk of the move is recent, and recent moves on thin-volume thematic ETFs are the kind that get reversed when the catalyst slips. The one-year number is the more honest framing for what people mean when they say UFO "tripled." A 165% gain is not quite a triple, but starting from a depressed base around $24.64 a share last May, it functionally was for anyone who bought near the lows. Stretch the lens further and the picture cools. Over five years, UFO is up 135% against SPY s 80%, which is real outperformance, but it took until 2026 for the gap to open up. For most of the fund s life since its April 2019 inception, UFO bled relative to the S&P, and the people holding it were holding a thesis, not a winner. UFO tracks the S-Network Space Index, a basket of companies that derive most of their revenue from satellite operations, launch services, defense space contracts, and the adjacent ground-and-aerospace plumbing. The top holdings cited across recent coverage include Rocket Lab USA, AST SpaceMobile, Planet Labs, Iridium Communications, MDA Space, ViaSat, and Garmin. Those names tell you most of what you need to know. UFO is a concentrated bet on the small and mid-cap companies that win when satellite broadband, Earth observation, and orbital launch demand all move in the same direction at once. Three drivers stacked on top of each other to produce the run. First, a SpaceX IPO catalyst. Andrew Chanin, the CEO of Procure Holdings, has been telling anyone who will listen that an expected SpaceX IPO by the end of 2026 would likely make the company the top holding in UFO through index inclusion, with a rumored $1.5 trillion valuation on the offering. The whole basket has rallied as a SpaceX proxy trade, even though UFO currently holds no direct SpaceX exposure. Second, defense satellite contracts and the Space Development Agency award cycle pulled the orbital infrastructure names higher. Third, the April 10, 2026 NASA Artemis II splashdown reminded a generation of capital that the lunar program is a real budget line, not a slide deck. Inflows confirmed the narrative was selling. UFO took in $321 million in net flows during April alone and crossed $1 billion in AUM on May 27, seven years after launch. That is the part of the move that looks structural. A fund that spent most of its life under $200 million in assets has become a vehicle institutional desks are using to express a thematic view they cannot easily get elsewhere, since the competing Tema Space Innovators ETF reached $1.27 billion in AUM over a similar window. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Procure ETF Trust II Procure Space didn t make the cut. Grab the names FREE today. Here is the part that should slow you down. 60% of UFO s holdings are pre-profit space companies sitting on a combined $1.85 billion backlog. Backlog is a pipeline of contracted work that still has to convert to revenue, and revenue still has to convert to earnings. Jack Hough at Barron s flagged in late April that the basket was trading at over 100x earnings with many companies being pre-profit or thinly profitable, and recommended a more grounded approach using diversified aerospace and defense names with current cash flows. He wrote that before the April-to-May leg added another 30%+ on top. The expense ratio is 0.75%, which is fine for a thematic fund but is not free

UFO Turned a Forgotten Thesis Into 165% Returns While the S&P Gained 11%

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