Private – Procure

Who Decides What Counts as a Space Company?

BY PROCUREAM RESEARCH

Somewhere around 100 kilometers, or 62 miles, up, the air thins past the point where a wing can hold anything aloft. Fly higher and a plane stops working as a plane. That altitude is called the Kármán line, and by broad convention, supported by the Fédération Aéronautique Internationale among others, it marks where space begins.

That line answers one question well. It tells you where space is. It tells you nothing about which companies belong to it. A satellite ground station in Colorado never leaves the ground, and a rocket company spends most of its year on a factory floor.

So the harder question comes next. If space starts 62 miles overhead, what makes a company sitting down here a space company? There are two ways to answer.

Judgment. A manager studies the industry, forms a view about which companies will matter, and builds a portfolio around that conviction. The answer shifts whenever the manager’s thinking shifts.

Rules. Guidelines are written down in advance, published, and applied to every company the same way.

The distinction matters more than it might appear. In a sector this young, nobody has settled on a definition of the space economy. Whoever writes that definition determines what ends up inside a space industry portfolio, and specifically inside a space ETF.

One set of rules already exists, and what it produces is worth examining.

The test has two halves, and most people only remember one

The Procure Space ETF^® follows a published methodology. The rules ask whether a company’s products either have space-based functions as their essential purpose, or depend on space-based functions to work at all.

The first half is the obvious one. Things that go to space, and things that operate in space. Launch vehicles. Satellites. Nobody argues about these.

The second half is where the sorting actually happens. For a company whose products never leave the surface of the Earth, space has to play an essential role in the business. A GPS smartwatch without its satellite connectivity is a step counter with a clock. A car with GPS navigation still drives. One of those is a space company and the other is a car with a nice feature, and the test tells you which is which without anyone having to hold an opinion about it.

From there the rules get specific. At least 80% of UFO is comprised of space-based companies that derive a majority of their revenue from rocket and satellite manufacturing and operation, ground equipment used with satellite systems, space technology and hardware, space-based imagery and intelligence services, and telecommunications, television and radio broadcasting.

Notice what the rules never ask. Which company employs the best engineers? Which one wins the next contract? Which one happens to be trendy?

What rules find that judgment misses

Applied across the market, rules produce results that look nothing like a space movie.

As of September 4, 2026, Trimble* and Garmin* were the two largest positions in UFO, at 6.78% and 6.62%. Neither builds a rocket. Both run precision positioning businesses that would collapse without a constellation overhead. Behind them sit Sirius XM* at 5.88%, a radio company whose entire product is beamed down from orbit, and Viasat* at 5.81%. Four of the largest positions, and not one of them builds a launch vehicle.¹

6.78%

Trimble Inc, UFO’s largest holding as of September 4, 2026. It does not build rockets.

The names you would picture rank lower. SpaceX* was at 5.29%, Rocket Lab* at 3.55%, and Planet Labs* at 3.35%.

They qualify under the first half of the test rather than the second, and their weights in UFO come from a modified capitalization weighted, free float and space revenue adjusted formula. Not from how photogenic the business is.

That inversion makes the clearest case for writing the rules down. Every space story has a launch in it. Launch is one segment of a chain that also includes the ground stations, the receivers, the imagery, and the recurring revenue underneath all of it.

What that costs

A published rule takes individual security selection out of the equation. No manager’s view about which companies will survive the decade sits between an investor and the sector.

That cuts both ways, and it is worth being direct about it. A manager who reads a downturn correctly can protect capital that a rule will not. A manager who reads it wrong can do damage a rule would never have caused. Passive and active are not better and worse, they are different bets. Active management wagers on a person. A rules-based approach wagers on a sector and on the rules that define it.

For an industry this young, the appeal of the second bet is that it can be audited. The methodology is published in advance, and UFO publishes its holdings every day.

Both approaches draw a line somewhere. Only one of them lets you read it before you invest.

¹ ProcureAM, www.procureetfs.com/ufo, September 2026

Important Information

*As of September 4, 2026, Trimble Inc (TRMB) was a 6.78% holding, Garmin Ltd (GRMN) was a 6.62% holding, Sirius XM Holdings Inc (SIRI) was a 5.88% holding, Viasat Inc (VSAT) was a 5.81% holding, Space Exploration Technologies Corp (SPCX) was a 5.29% holding, Rocket Lab Corp (RKLB) was a 3.55% holding, and Planet Labs PBC (PL) was a 3.35% holding in the Procure Space ETF^® (NASDAQ: UFO).

For a complete list of holdings in UFO, visit: https://procureetfs.com/ufo/. Fund holdings and sector allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security.

Please consider the Fund’s investment objectives, risks, and charges and expenses carefully before you invest. This and other important information is contained in the Fund’s summary prospectus and prospectus, which can be obtained by visiting procureetfs.com. Read carefully before you invest.

Investing involves risk. Principal loss is possible. The Fund is also subject to the following risks: Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the funds. Brokerage commissions will reduce returns.

Aerospace and defense companies can be significantly affected by government aerospace and defense regulation and spending policies. The exploration of space by private industry and the harvesting of space assets is a business based in future and is witnessing new entrants into the market. Investments in the Fund will be riskier than traditional investments in established industry sectors. The Fund is considered to be concentrated in securities of companies that operate or utilize satellites which are subject to manufacturing delays, launch delays or failures, and operational and environmental risks that could limit their ability to utilize the satellites needed to deliver services to customers. Investing in foreign securities are volatile, harder to price, and less liquid than U.S. securities. Securities of small- and mid-capitalization companies may experience much more price volatility, greater spreads between their bid and ask prices and significantly lower trading volumes than securities issued by large, more established companies. The Fund is not actively managed so it would not take defensive positions in declining markets unless such positions are reflected in the underlying index. Please refer to the summary prospectus for a more detailed explanation of the Funds’ principal risks. It is not possible to invest in an index.

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