ETFs with exposure to SpaceX have seen their assets skyrocket, a sign of how badly investors want a piece of Elon Musk’s space company, whether for the long haul or to play a potential IPO pop.
The ERShares Private-Public Crossover ETF (XOVR), an innovation-focused fund and the first ETF to offer SpaceX exposure, has climbed to $2.2 billion in assets from less than $500 million at the end of March.
The Tema Space Innovators ETF (NASA), the biggest space-focused ETF, has ballooned to $2.6 billion after launching only on March 30.
The Baron First Principles ETF (RONB), the flagship ETF of well-known investor Ron Baron, a major backer of Musk’s companies, jumped from less than $240 million to $1.5 billion over the same stretch.
And the KraneShares AI & Technology ETF (AGIX), a tech-focused fund, has 5x’d its assets to $1 billion since the end of March.
The size of those jumps suggests that holding SpaceX inside an ETF has been a winning move for issuers and something investors are actively hunting for.
SpaceX, scheduled to go public Friday, will be the biggest IPO ever. At the $135 offer price, its implied valuation of about $1.75 trillion would make it one of the ten most valuable companies in the world. Judging by the inflows, some investors clearly think it can grow even bigger, while others may be betting that an IPO pop in the shares will trickle down to the ETFs.
IPO Pop Impact
While owning SpaceX may or may not prove to be a smart long-term call, any IPO pop is unlikely to move these ETFs much. These funds hold SpaceX, but they also hold dozens of other names. Outside of single-stock ETFs, a fund is generally not the best way to get exposure to one company.
The inflows themselves have also watered down the SpaceX stakes. As new money has poured in, the funds’ SpaceX holdings haven’t kept pace.
SpaceX made up almost 13% of RONB’s portfolio at the end of March and now sits around 2.5%. NASA has gone from 10% to under 7%, AGIX from 3.6% to 1.5%, and XOVR from 45% to 14%.
XOVR has gone as far as discouraging anyone trying to pile in for the pop. It’s reportedly rejecting certain large creation orders before the IPO and will impose a redemption fee of up to 2% starting on the day SpaceX begins trading, a move meant to stop hot money from diluting existing shareholders ahead of the listing and then cashing out right after.
We’ll see how it all plays out. Either way, the rush into these ETFs is one more sign of just how much excitement SpaceX is generating. It also fits a broader trend of funds adding private-company exposure to set themselves apart.
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