£1,000 buys 694 shares in this red-hot UK space stock that’s smashing the FTSE 100 index
The FTSE 100 index has performed well recently. Over the last year, itâs up about 18%. That gain pales in comparison to the returns generated by a UK-listed space stock, however. Over the same period, this stock has delivered around 10 times that return!
Exposure to leading space companies
The stock Iâm talking about is the Seraphim Space Investment Trust (LSE: SSIT). It invests in early and growth stage space technology (spacetech) companies that are trying to solve challenges associated with communications (eg, satellite broadband), climate change, mobility, and global security.
At present, the investment trust trades for £1.44 a share. That means that a £1,000 investment buys roughly 694 shares (ignoring trading commissions).
Whatâs behind the share price surge?
Why has this investment trust done so well recently? A few reasons.
One is that the space industry is really coming into focus as a result of the potential initial public offering (IPO) of Elon Muskâs space company SpaceX later this year. This event has got investors looking at other ways to play the theme.
I suspect this IPO has also increased awareness of how large the space industry could potentially be in the future. According to analysts at Morgan Stanley, it could be generating annual revenues of more than $1trn by 2040, up from around $350bn in 2020.
Another reason is that defence stocks have surged amid the high level of geopolitical instability. Looking ahead, space technology is likely to play a major role in defence.
Additionally, there has been some interesting portfolio activity recently. For example, in December, its largest portfolio holding, ICEYE â a satellite company that offers persistent, real-time Earth observation for 24/7 tactical decision-making in any condition/weather â signed a â¬1.7bn contract with German defence powerhouse Rheinmetall to provide space-based reconnaissance data.
Thatâs a major deal (and shows how space and defence are closely related). And it sent shares in the investment trust up around 20% at the time.
The trustâs share price also got a bump earlier this week after the company released its January 2026 newsletter. Here, it noted that private space funding hit a record $12.4bn in 2025, up 48% on 2024.
It also said that global investment in space technology is set to accelerate in 2026. This acceleration is set to be fuelled by defence-linked satellites, expanded launch capacity, and AI applications in orbit.
An investment opportunity to consider?
Is this investment trust worth considering as a growth play for an ISA or SIPP today? I think so, assuming an investor has a high tolerance for risk and a long-term investment horizon.
Itâs not a product Iâd load up on. That’s because this industry is still in its infancy and many of the companies it has invested in are quite speculative from an investment perspective.
Thereâs also some portfolio concentration risk. At present, ICEYE represents nearly 40% of the portfolio so if this company experiences some kind of setback, the investment trust could be impacted significantly.
All things considered, however, I think it has a lot of potential.
The post £1,000 buys 694 shares in this red-hot UK space stock thatâs smashing the FTSE 100 index appeared first on The Motley Fool UK.
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Edward Sheldon has no positions in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
