By Andrew Chanin

Current warfare between Ukraine and Russia and in the Middle East is increasing apprehension regarding military actions throughout the world. Traditional defense strategies are rapidly evolving to utilize different technologies. The future is pointing to the space sector as the new weapon for successful warfare. Space will be critical for communications, information, navigation, and weaponry:

Communications

Communication between troops and headquarters will be dependent on satellites. Satellite transmission can offer instantaneous connectivity regardless of local terrain or rural location.

Navigation

Military navigation systems currently rely on satellites to aid in the routing of select submarines. The data gathered can provide valuable position and velocity input.

Information

Satellite imagery has become crucial in identifying enemy locations, quantifying munitions build up, forecasting meteorological conditions, and evaluating the effectiveness of military actions. In today’s environment, Ukraine, Russia, Israel, Iran, and other countries have already seen the value of data obtained through satellite imagery during warfare.

Weaponry 

Satellites for communications and information will be a critical resource during future warfare. However, if they are incapacitated or destroyed, the military will be missing an essential tool. 

In February of 2024, the White House confirmed reports that Russia was developing an anti-satellite capability.¹ In 2007, China conducted a test of an anti-satellite weapon against one of its own satellites. Not only was the satellite destroyed,  over three thousand pieces of orbital debris were created that still pose a threat to existing satellites.²

It will be necessary to build resilient satellite  systems with protection from cybersecurity attacks, as well as physical attacks, so as not to hinder the continuous flow of information and communications

Companies are developing space applications for military purposes for use today and in the future. The Space ETF by Procure (NASDAQ: UFO) includes corporations focused on creating and protecting space assets:

• Satellite communications networks are managed by Viasat*, EchoStar*, Globalstar*, and Iridium Communications*. 
• Satellites are being launched by Rocket Lab* and AST Space Mobile*. 
•  Satellite imagery is being provided by Planet Labs*.  
• Technologies for missile warning and space intelligence are being created by L3Harris*.
• Satellites with secure ultra-high frequencies for mobile forces are being developed by Lockheed Martin*.

Space focused companies will play a growing role in maintaining the effectiveness of military forces throughout the world. The growing trend in defense is found in space. UFO, The Space ETF by Procure, provides investors with exposure to these vital companies.

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¹ “White House confirms intelligence showing Russia developing “anti-satellite capability”, by Caitlin Yilek, February 15,2024, cbsnew.com.

² “Protecting our critical satellite infrastructure: the importance of space-based infrastructure to humanity and its status within NATO”, by David Eagleson, October 23, 2023, nato.int.

Important Information:

As of August 18th, 2024, AST SpaceMobile (ASTS) was a 8.84% holding, EchoStar (SATS) was a 3.80% holding, Globalstar (GSAT) was a 4.84% holding, Iridium Communications (IRDM) was a 4.44% holding, L3Harris Technologies (LHX) was a 2.33% holding, Lockheed Martin (LMT) was a 2.72% holding, Planet Labs (PL) was a 2.99% holding, Rocket Lab (RKLB) was a 5.30% holding, Viasat (VSAT) was a 7.01% 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.

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 Funds 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.