SpaceX’s record IPO plan has investors rushing to a niche ETF

A Bloomberg News report this month that Musk’s rocket company is targeting a 2026 listing that could raise more than US$30 billion and value it at about US$1.5 trillion. Photo by Wikimedia Commons

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A bid by individual investors to grab a sliver of Space Exploration Technologies Corp. (SpaceX) before it goes public has propelled a niche ETF into the spotlight, highlighting retail euphoria over Elon Musk’s business empire and the scramble for access to equity in private companies.

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The ERShares Private-Public Crossover ETF (ticker XOVR) has taken in more than US$470 million since Dec. 8 — more than half its total assets — as investors seek to get in on what could become the biggest initial public offering ever.

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The catalyst: A Bloomberg News report this month that Musk’s rocket company is targeting a 2026 listing that could raise more than US$30 billion and value it at about US$1.5 trillion. The ERShares ETF is drawing attention because it holds a small piece of SpaceX through a special-purpose vehicle, potentially making it the only U.S.-listed ETF with exposure, according to an analysis of Bloomberg-compiled data by Bloomberg Intelligence’s Breanne Dougherty.

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That has turned XOVR, launched in 2017, into a speculative wrapper for Musk Inc.

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“This surge is likely linked to SpaceX stating a 2026 IPO target,” BI’s Dougherty and Charles Bond wrote. “Just the hint of a SpaceX IPO — now lightly penciled in for late 2026 — hit the trifecta of investor obsessions: breakthrough innovation,” a privately held startup valued at over US$10 billion “and a revived IPO pulse.”

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The ETF gained exposure to the Musk-led company via a special purpose vehicle in December 2024, offering rare access to the private company.

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At that time, ERShares had a total investment of more than US$20 million in SpaceX, which represented roughly 12 per cent of the ETF’s assets, according to a press release.

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SpaceX was XOVR’s first private holding after the fund company changed its name in August 2024 and added private entities to its investing mandate, which also includes public entrepreneurial ventures. However, as money rolled into the fund, the SpaceX holding shrunk to about four per cent of its assets, data compiled by Bloomberg shows, making it XOVR’s fourth-largest holding after Nvidia Corp., Meta Platforms Inc. and Maplebear Inc.

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Joel Shulman, founder and chief investment officer of ERShares, said the team is actively exploring opportunities to increase exposure to these investments. He acknowledges that rapid growth in any fund “naturally dilutes any positions that are, by their nature, more difficult to increase quickly, such as a private asset investment.” He also noted that any fair value assessment will be conducted in accordance with the requirements of the Investment Company Act of 1940 and generally accepted accounting principles.

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To Jeffrey Ptak, a managing director at Morningstar Inc., the SpaceX position has become such a small part of the portfolio that even if the issuer marks it higher — as many investors expect — the effect on overall performance would be marginal. Since the holding isn’t changing while the fund continues to attract cash, most of that inflow is likely being allocated to publicly traded stocks, further diluting SpaceX’s share of the portfolio, he said.