Korean Asset Managers Face Volatility in SpaceX ETFs as High Entry Prices Challenge Returns
South Korean asset managers are actively bolstering their investments in SpaceX, a prominent aerospace company, through Exchange-Traded Funds (ETFs). This surge in exposure comes amidst robust investor demand for the newly listed rocket maker.
Among these, the Ace US Space Tech Active ETF, managed by Korea Investment Management, stands out. As of Tuesday, SpaceX constituted a significant 26.41 percent of its total portfolio, underscoring the fund’s strong conviction in the space technology sector.
Initially, this particular fund aimed to secure allocations from SpaceX’s initial public offering (IPO) via Mirae Asset Securities. However, after the brokerage couldn’t secure the desired share allocation, the fund quickly adapted, opting for open-market purchases to gain exposure.
Following closely is Samsung Asset Management’s Kodex US Space & Aerospace ETF, dedicating 25.08 percent of its assets to SpaceX. This fund, while typically passive, is strategically designed to incorporate newly listed entities, like SpaceX, following approval from its index committee, facilitating rapid portfolio adjustments.
Korean asset managers demonstrated significant interest, collectively acquiring 334.5 billion won (approximately $240 million USD) worth of SpaceX shares on its inaugural trading day. This suggests that their overall exposure to the aerospace giant has likely intensified further by Tuesday.
However, despite substantial allocations—some funds dedicating nearly a quarter of their portfolios to SpaceX—these specialized space technology ETFs have faced challenges in fully capitalizing on the stock’s impressive initial surge.
Performance figures illustrate this disparity. As of 2 p.m. on Tuesday, the Ace US Space Tech Active ETF saw a 4.61 percent increase, reaching 12,255 won ($8), rebounding from a sharp 10.81 percent drop in the preceding session. Similarly, the Kodex US Space & Aerospace ETF rose 4.68 percent to 12,530 won, recovering from a 7.82 percent decline experienced the previous day.
These modest gains contrast sharply with SpaceX’s own performance. The Nasdaq-listed company had surged an impressive 20 percent on Monday, its first full trading session, following an initial 19 percent rally on Friday after its highly anticipated market debut.
The impact of this dynamic was even more evident in ETFs that, for various reasons, had not yet incorporated SpaceX into their investment portfolios.
For instance, the Tiger US Space Tech ETF, managed by Mirae Asset Global Investments, experienced a 4.29 percent decline, trading at 12,265 won as of 2 p.m., following a significant 12.02 percent plunge in the preceding trading session.
This fund, launched in April, commands approximately 2.32 trillion won (around $1.66 billion USD) in assets under management, making it the largest US space-themed ETF in Korea designed to eventually gain exposure to SpaceX.
Initially, the Tiger ETF anticipated benefiting from SpaceX IPO allocations secured through its affiliate, Mirae Asset Securities. However, with those plans not materializing, the passive fund has now scheduled its addition of SpaceX shares for Tuesday.
Industry analysts suggest that the subdued gains observed in some SpaceX-targeting ETFs largely stem from variations in their entry timing. Funds that missed out on IPO allocations often had to acquire SpaceX shares at higher prices in the secondary market, impacting their overall return potential.
Furthermore, the underperformance can also be attributed to weakness in other portfolio holdings. As SpaceX attracted considerable investor capital, shares of other key players in the US space-themed ETF landscape—such as rocket manufacturer Rocket Lab and aerospace infrastructure specialist Redwire—came under pressure. On Friday, these stocks fell by 9.34 percent and 11.53 percent, respectively, further dampening overall ETF performance.
“Despite SpaceX’s remarkably strong market debut, the majority of related space technology ETFs have either seen minimal gains or have declined,” noted Han Su-jin, an analyst at Samsung Securities.
Han emphasized that “the returns generated by SpaceX-targeting ETFs are contingent not solely on their direct exposure to the innovative rocket-maker, but critically, also on the broader performance of their diversified portfolio holdings.”
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