Given all the recent hype over the SpaceX IPO, it’s no secret that space stocks have seen a resurgence as of late. If anything, the SpaceX news has reminded advisors and investors that space stocks can tap into a few crucial themes — AI, defense budgets, and the overall space economy.
Key Takeaways:
- The SpaceX IPO has created renewed interest in the space sector, which was already benefitting from a menagerie of different tailwinds.
- While pure-play space exposure has its merits, attaining diversified investments through industrials ETFs could provide a lower-risk approach.
- The State Street Industrial Select Sector SPDR ETF (XLI) offers a noticeable tilt towards aerospace & defense, while still diversifying through other industry exposures.
Looking broadly, there are a couple of different ways for advisors and investors to tap into the opportunity set within the space sector right now. They could try to hop on to SpaceX’s momentum, or could alternatively diversify by investing across a variety of other compelling companies within the sector.
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For those looking to take the diversification angle, gaining focused exposure to the industrials exposure could be a good start. The industrials sector includes a variety of different industries, including aerospace, defense, electrical equipment, and machinery, among others.
XLI Provides a Diversified Take on Industrials Exposure
Investing in the right kind of industrials sector ETF could provide a diversified take on space exposure. As just one example, take a look at what the State Street Industrial Select Sector SPDR ETF (XLI ) brings to the table.
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XLI’s strategy focuses on gaining targeted exposure to the industrials companies within the S&P 500. Some may be wondering just how much aerospace exposure lies within XLI’s portfolio, but the fund holds a noticeable tilt towards the sector. As of June 12, 2026, aerospace & defense is the top sector tilt in the fund’s portfolio, representing 24.49% of its overall weight.
This approach allows XLI to tap into momentum within the aerospace industry without being beholden to it. The fund may not hold SpaceX in its portfolio, but it remains engaged with key space players like GE Aerospace.
Notably, XLI also provides plenty of exposure to the other areas of the industrials sector. The industrials sector is also benefitting from AI adoption and the rising need for electricity. Given that, there is more momentum ahead for the sector than just enthusiasm for space investing.
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XLI’s approach to investing in the industrials sector has paid off with strong results this year. As of May 31, 2026, the fund’s NAV has risen 11.95% year-to-date.
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