3 Ways to Get Space Economy Exposure Without Buying SpaceX Stock

Few stocks offer as much exposure to the space economy as Space Exploration Technologies. The company -- commonly known as SpaceX -- is the biggest space stock in the world, with direct exposure to rockets and satellites.

But it isn't the only investment with these growth opportunities. Buying one of the three space economy exchange-traded funds (ETFs) below offers more-balanced exposure.

1. Tema Space Innovators ETF

The management consultancy McKinsey predicts that the global space economy will grow from $630 billion in 2023 to $1.79 trillion by 2035. The Tema Space Innovators ETF (NYSEMKT: NASA) is designed to capitalize on this growth.

The Tema ETF has a relatively high 0.75% expense ratio. In return, investors will get exposure not only to a diversified basket of publicly traded space stocks, including SpaceX and Rocket Lab, but also to a handful of pre-IPO companies that aren't available yet to the public.

2. Procure Space ETF

Procure Space ETF (NASDAQ: UFO) has a clever ticker as well as a bold mission statement.

"Since the beginning of humankind, our ancestors have looked to the skies with immense curiosity in search of answers," the ETF's website says. "UFO, the Procure Space ETF, may provide diversification beyond the limitations of solely earthbound companies."

This ETF tracks the VettaFi Space index, making it an index fund. In this regard, the 0.75% expense ratio seems rather high, especially given that the fund holds only publicly traded assets.

3. ARK Space & Defense Innovation ETF

The ARK Space & Defense Innovation ETF (NYSEMKT: ARKX) is a fund managed by ARK Invest, the firm led by growth investor Cathie Wood.

Unlike the other ETFs on this list, it includes both space stocks and defense stocks. As its name suggests, the fund intends to invest at least 80% of its assets in companies engaged in space exploration and defense innovation. This ETF has seven areas of focus:

• autonomous mobility
• intelligent devices
• advanced battery technologies
• 3D printing
• reusable rockets
• adaptive robotics
• neural networks

As with every other ETF on this list, the ARK fund has a 0.75% expense ratio. Those fees have proved excessive given the fund's long-term performance. Since it was launched in early 2021, it has delivered about 45% in returns -- roughly half of what the S&P 500 index has delivered.

None of the funds on this list has performed very well over the long term compared to broad market indexes like the S&P 500. The Tema ETF has posted negative returns since its inception, while the Procure fund has also posted market-lagging returns.

Lackluster historical performance should stop you from investing in any of these ETFs. But understanding how these funds have performed -- especially in light of their high management fees -- should have an impact on whether or not you ultimately choose one of them.

For my money, I'm sticking with low-cost broad market index funds with a long-term approach. But investors keen to bet more heavily on the space economy without completely sacrificing diversification should consider whether any ETF on this list fits their requirements.

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Rocket Lab. The Motley Fool has a disclosure policy.