The ASX is no stranger to new exchange-traded funds (ETFs). In fact, our share market regularly welcomes new ASX ETFs seemingly every other month.
These new ETFs range from index funds to thematic ETFs that aim to capitalise on the latest hot trend of the markets.
The new offering from ETF provider BetaShares arguably falls into the latter camp.
Betashares has recently announced that ASX investors should expect a new fund to debut on the ASX in the near future. This fund will be known as the Betashares Space Industry ETF and will trade under the ticker code 'RCKT'. No prizes for guessing what this fund might allow ASX investors to put their money into.
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Getting ahead of a SpaceX IPO?
There are also no prizes for guessing what may have prompted BetaShares, a company that offers thematic ETFs ranging from cybersecurity and cryptocurrency to uranium and esports, to till this ground.
The investing world has been gripped this year by substantiated rumours that Elon Musk is finally about to float his monstrous space exploration and utilisation company, SpaceX, on the public markets. Musk has previously been famous for his stewardship of electric battery and vehicle manufacturer Tesla Inc (NASDAQ: TSLA), which has been listed on the American stock markets for more than a decade.
But in addition to Tesla (and a few other companies for good measure), Musk also heads up SpaceX, also known as Space Exploration Technologies Corporation. This company was previously well-known for its dramatic and cutting-edge rocket apparatus. Not to mention its Starlink satellite internet service. But in recent years, Musk has integrated it into his other business ventures. Earlier this year, he finalised a merger of SpaceX with xAI, the company that now owns X (formerly Twitter).
If, or maybe when, SpaceX IPOs, some investors are anticipating that it could have a valuation north of US$1 trillion, perhaps even US$2 trillion. That would make this company the biggest IPO in history. It's probably fair to say that Betashares was anticipating this event when it pressed the launch button on RCKT.
What will this new ASX space ETF look like?
We don't yet know what kind of holdings this new ASX ETF from BetaShares may hold, aside from a potential stake in SpaceX upon its debut. However, we can look at some other ETFs for guidance here.
Over in the US, the ARK Space & Defense Innovation ETF (NYSE: ARKK) has been around since 2021. It currently holds names like RocketLab and Teradyne. VanEck also offers the VanEck Space Innovators ETF (SWX: JEDI) on European markets. This aptly-named fund holds Planet Labs and Firefly Aerospace amongst its top holdings. RCKT may hold some of these names when it eventually launches.
Space can be a tricky terrain to navigate for investors, though. Long-time readers might remember the explosive growth of Virgin Galactic Holdings Inc (NYSE: SPCE) back in 2021. Perhaps fuelled by COVID dollars, this space stock rocketed almost 300% in a month back in mid 2021. Today, though, at US$2.92 a share, it is down 99.7% from its 2021 peak of over US$1,100. SpaceX hopefuls will no doubt be hoping for a better experience than that. After all, in space, no one can hear you scream, even if you're a shareholder.
Let's see how the Betashares Space Industry ETF fares when it eventually launches on the ASX.
