SpaceX’s blockbuster IPO delivered the biggest public offering of all time on its Nasdaq debut last week. With the eyes of the world on Elon Musk’s space exploration giant, the heavily-hyped IPO has also sparked a frenzy of activity in the ETF space.
On Wednesday, Procure AM, issuer of the Procure Space ETF (Ticker: UFO), added SpaceX (Ticker: SPCX) to the fund. The move follows the latest reconstitution of the VettaFi Space Index, which UFO tracks. SpaceX joins UFO at a weight of 6.17% as of June 16, making it the fund’s top holding, followed by EchoStar Corp. (Ticker: SATS), Rocket Lab Corp. (Ticker: RKLB), Trimble Inc. (Ticker: TRMB), and AST SpaceMobile Inc. (Ticker: ASTS).
“For a decade, investors have asked us how to get SpaceX exposure through a public vehicle,” said Andrew Chanin, Co-Founder and CEO of ProcureAM, in a statement. “UFO is now that vehicle, with the transparency and daily liquidity of an ETF.”
Also on Wednesday, asset manager Kurv Investment Management launched its Kurv SpaceX Enhanced Income ETF (Ticker: XSHP). The fund offers investors the potential for current income while maintaining exposure to SpaceX’s share price, according to Kurv.
ProcureAM and Kurv's moves are the latest in a series of SpaceX-related ETFs. On Monday, ETF provider Direxion launched its Daily SpaceX Bull 2X ETF (Ticker: LOFF), which seeks daily investment results, before fees and expenses, of 200% of the daily performance of SpaceX.
Also on Monday, Themes ETFs launched the Leverage Shares 2X Long SpaceX Daily ETF (Ticker: SPCH) and the Leverage Shares 2X Short SpaceX Daily ETF (Ticker: SSPC), which aim to tap into, respectively, bullish and bearish sentiment around Elon Musk’s company. The same day, REX Shares and Tuttle Capital Management launched the T-REX 2X Long SpaceX Daily Target ETF (Ticker: SPAX), a leveraged ETF that it says delivers 200% of SpaceX’s daily performance.
Thrust into the spotlight amid the SpaceX IPO, leveraged ETFs offer a specific set of characteristics to investors, according to Aga Kuplinska, SVP of product development at Tidal Financial Group. "Leveraged ETF (daily) investors are usually optimizing for tactical exposure rather than ‘own it forever’ economics,” she said, in a statement Wednesday. “They’re looking to express a short-term directional view, often around events/liquidity windows, with the expectation they’ll trade in and out quickly.”
"So the 'feature set' that matters most is intraday tradability/liquidity, tightness of the daily reset mechanics to the benchmark, and predictability of performance over the intended holding period (because compounding/volatility drag is part of the product)," she added.
Other ETF issuers are also looking to harness the massive interest in the historic SpaceX IPO with the launch of new single-stock funds themed around the rocket maker. These include ProShares, with its Ultra SpaceX ETF (Ticker: SPCF), which is targeting 2x daily returns of SpaceX, and Defiance ETFs with its Defiance Daily Target 2X Long SpaceX ETF. The ETF aims to harness investor appetite for companies that have historically been private, as well as targeted exposure to high-profile companies.
Elon Musk’s company ended its first day of Nasdaq trading with an eye-watering valuation that topped $2 trillion and the stock has climbed more than 27% since its debut.
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