[Digital Today reporter Jinju Hong] As enthusiasm for aerospace and defense investment grows, exchange-traded funds (ETFs) that invest directly in space infrastructure such as satellites, communications and navigation are drawing attention in the market. Money is shifting from traditional defense-focused products to more specific space themes.

On April 24 (local time), CNBC reported that investors have recently shown more interest in products that directly target space technology and infrastructure than ETFs that broadly cover aerospace and defense.

Cynthia Murphy (신시아 머피), head of research at VettaFi, said the number of ETFs that put space themes front and center is increasing, citing the Procure Space ETF and the Global X Defense Tech ETF as examples. She said defense themes are no longer limited to companies focused on traditional weapons systems and have expanded into multi-layered investment themes that include satellites, communications, navigation and cybersecurity.

Returns have also diverged. Since late February, as geopolitical tensions intensified, the Procure Space ETF has risen about 19 percent, while the Global X Defense Tech ETF has fallen 8 percent. Over the same period, the iShares U.S. Aerospace & Defense ETF, a flagship traditional defense product, has also fallen about 10 percent. Major holdings in the ETF include GE Aerospace, RTX Corp and Boeing.

The market is also seeing expectations that the space investment boom will not be limited to short-term geopolitical factors. Murphy said related themes stand out whenever tensions rise, but the space sector is a structural growth area where new technologies keep emerging and capital continues to flow in. She also stressed that governments plan to significantly expand investment in space and defense over the next 5 to 10 years.

Another factor boosting expectations for space investment is the possibility of an initial public offering (IPO) by SpaceX. In the market, expectations that SpaceX's listing is imminent are growing, spreading interest across the broader space theme.

Optimism across the defense sector is also continuing. Paul Baiocchi (폴 바이오치) of SS&C Technologies assessed the return environment for related assets positively, citing rising global defense budgets. He said large-scale investment is continuing in both the public and private sectors, and broad benefits are expected across areas including raw materials, energy infrastructure and electrification equipment.

Expanding investment in artificial intelligence (AI) is also emerging as a variable. Baiocchi pointed to bottlenecks in various resources, including power, transmission and construction materials, as well as semiconductors, during the build-out of AI infrastructure, and said rare earth supplies are also an important constraint in the defense sector.

Ultimately, the aerospace and defense ETF market is rapidly expanding beyond a structure centered on traditional defense stocks toward a broader scope that includes satellites, cybersecurity, communications and resource supply chains. Future market direction is expected to be determined by geopolitical risks, increases in national defense budgets, moves to list SpaceX and whether investment in AI infrastructure expands.