Korea’s ETF race heats up over SpaceX's blockbuster IPO

As SpaceX’s initial public offering draws closer, South Korean asset managers are racing to secure exposure ahead of the blockbuster listing.

In a deal expected to rank among 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. It is expected to file for its IPO in the coming days, paving the way for a market debut as early as mid-June.

As SpaceX accelerates preparations, local asset managers are moving quickly to roll out products that would allow them to incorporate the company into their exchange-traded funds.

Korea Investment Management has recently secured approval from the Korea Exchange for its Ace US Space Tech Active ETF and is expected to launch it as early as April. As an active ETF, the fund allows portfolio managers to add newly listed stocks such as SpaceX without waiting for periodic rebalancing, enabling faster inclusion than passive funds.

Some asset managers are going further by tweaking product structures to ensure SpaceX can be added swiftly. Earlier this month, Samsung Asset Management launched the Kodex US Aerospace ETF with SpaceX’s listing in mind. While the fund tracks the iSelect US Aerospace Index, it includes a special provision allowing up to 25 percent allocation to newly added stocks outside regular rebalancing schedules.

The ETF currently tracks US aerospace firms such as Rocket Lab, AST SpaceMobile, Intuitive Machines and EchoStar, and is widely expected to incorporate SpaceX once it goes public.

Other major players, including Timefolio Asset Management and Woori Asset Management, are also reviewing plans to include SpaceX in their portfolios, with final decisions likely to depend on post-listing market conditions.

The rush underscores strong demand among Korean investors for high-profile US growth stocks. Tesla, for instance, remains one of the most popular US equities among Korean retail investors, suggesting that SpaceX could attract similar enthusiasm.

Amid the scramble to gain early exposure, some asset managers have also explored indirect routes. Hana Asset Management had planned to incorporate the Barron’s First Principles ETF into its 1Q US Aerospace Tech ETF to gain indirect exposure to SpaceX, as the Barron Capital-managed fund allocates roughly 10 percent of its assets to the company.

However, the plan was withdrawn after the Financial Supervisory Service raised concerns over marketing materials that described the strategy as effectively including SpaceX, highlighting regulatory limits on holding unlisted shares.

“Asset managers are scrambling to gain exposure ahead of the IPO, but this is expected to be a listing that investors worldwide will be eager to bet on,” an industry official said. “Strong global demand could limit the actual level of inclusion in ETFs.”