Strong Tesla-Driven Retail Appetite Fuels Race for SpaceX Exposure
As the SpaceX initial public offering (IPO) nears, South Korean asset managers are in a race to secure exposure to the highly anticipated listing.
The SpaceX IPO is expected to be one of the largest in Wall Street history. The rocket and satellite company is reportedly aiming to raise $75 billion at a valuation of $1.75 trillion. SpaceX is expected to file for its IPO soon, potentially leading to a market debut as early as mid-June.
In anticipation of SpaceX’s accelerated IPO preparations, local asset managers are actively developing products to include the company in their exchange-traded funds (ETFs).
Korea Investment Management recently received approval from the Korea Exchange for its Ace US Space Tech Active ETF and plans to launch it as early as April. As an active ETF, the fund allows portfolio managers to incorporate newly listed stocks like SpaceX promptly, bypassing the waiting period associated with periodic rebalancing in passive funds.
Some asset managers are adjusting their product structures to ensure quick addition of SpaceX shares. Earlier this month, Samsung Asset Management launched the Kodex US Aerospace ETF with the SpaceX IPO in mind. While this ETF tracks the iSelect US Aerospace Index, it includes a special provision allowing up to a 25 percent allocation to newly listed stocks, outside of regular rebalancing schedules.
The Kodex US Aerospace ETF currently tracks US aerospace firms like Rocket Lab, AST SpaceMobile, Intuitive Machines, and EchoStar, and it’s widely anticipated to incorporate SpaceX after its public listing.
Other key players, including Timefolio Asset Management and Woori Asset Management, are also evaluating plans to incorporate SpaceX into their portfolios. Final decisions are expected to depend on market conditions post-listing.
This surge in interest reflects the strong demand among Korean investors for high-profile US growth stocks. Tesla, for example, remains a popular US equity among Korean retail investors, suggesting SpaceX could generate similar levels of investor enthusiasm.
Amid the scramble to gain early exposure, some asset managers have explored indirect approaches. Hana Asset Management initially planned to include the Barron’s First Principles ETF in its 1Q US Aerospace Tech ETF to indirectly invest in SpaceX. The Barron Capital-managed fund allocates approximately 10 percent of its assets to SpaceX.
However, this plan was withdrawn after the Financial Supervisory Service raised concerns regarding marketing materials that described the strategy as effectively including SpaceX, highlighting regulatory limitations on holding unlisted shares.
“Asset managers are scrambling to gain exposure ahead of the IPO, but this listing is expected to attract investors globally,” an industry official said. “Strong global demand could limit the actual level of inclusion in ETFs.”
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