The global race among exchange-traded fund (ETF) providers to launch space-focused products has intensified, driven by immense retail investor demand ahead of Elon Musk’s highly anticipated SpaceX initial public offering (IPO). SpaceX, the world’s largest rocket company, has captivated investors with its vision for interplanetary travel, including building human metropolises on Mars and establishing data centres in space. The blockbuster float, expected to hit the boards in New York this Friday (Saturday AEST), has drawn over $US250 billion in investor demand, far exceeding the $US75 billion the company aimed to raise.
In Australia, Global X has become the latest to launch a space ETF on the ASX, just a day before SpaceX’s public debut. This positions them in direct competition with rival Betashares, which launched its own ASX-listed space ETF last month and has already attracted $50 million in inflows. Global X offers a management fee of 0.5 per cent annually, undercutting Betashares’ 0.57 per cent. Both funds track indices with fast-entry mechanisms, allowing mega-cap listings like SpaceX to be added rapidly, with Global X anticipating up to a 25 per cent weighting soon after listing.
Globally, the enthusiasm is equally palpable, with space ETFs pulling in $US8 billion since the year began, ranking second among Bloomberg’s 39 ETF themes for net inflows. BlackRock also launched an iShares Space Technologies ETF for European investors, mirroring the fast-entry mechanism. However, not all Australian providers are joining the charge. VanEck and ETF Shares have opted out, expressing concerns about retail investors being drawn in by hype. VanEck’s Arian Neiron warned against “pumping the tyres in a narrative” that could be “fraught with risk,” while Morningstar cautioned clients against SpaceX’s IPO, citing a potential valuation mismatch and the risk of post-lock-up selling.
