Korea Investment Management to channel SpaceX IPO shares into space ETF, fund

Korea Investment Management announced Thursday that it will participate in the initial public offering of SpaceX, which is set to list on June 12 local time.

SpaceX, Elon Musk's space technology company, is preparing what would be the largest stock market listing in history. The IPO is expected to raise between $75 billion and $80 billion.

SpaceX is targeting a valuation of approximately $1.75 trillion through the offering. The Wall Street Journal reported Tuesday that the company plans to file a registration statement with regulators containing its proposed offering price and other details. Earlier this year, SpaceX was valued at around $1.25 trillion after acquiring AI company xAI.

SpaceX plans to submit its IPO application during the first week of June ahead of the listing, with the final offering price to be confirmed on June 11 local time. Shares allocated to IPO participants will be available for confirmation before the market opens on June 12 local time.

Korea Investment Management plans to distribute the shares it secures through the IPO between its ACE US Space Tech Active ETF and the Korea Investment Global Space Technology & Defense Fund. The firm also plans to make additional purchases on the listing day.

The ACE US Space Tech Active ETF in particular aims to raise SpaceX's weighting to as much as 25 percent by combining its IPO allocation with additional open-market purchases. The SpaceX weighting within the ETF will be available on the ACE ETF website from June 13. The weighting within the Korea Investment Global Space Technology & Defense Fund will be disclosed later through asset management reports.

Kim Hyeon-tae, a senior portfolio manager in Korea Investment Management's Global Quant Management division who oversees both funds, said the active structure of both products gives them a key advantage. "Because both funds are actively managed, we can respond on the very day SpaceX lists," he said. "Passive products aim to fully replicate an index, which makes it difficult to add SpaceX quickly before it is included in the index — that is a key differentiator."

He added that another distinguishing feature of the two funds is their existing exposure to EchoStar, a proxy asset for SpaceX. "If SpaceX's share price volatility intensifies due to buying demand triggered by early inclusion in the Nasdaq 100 index or similar events, EchoStar could help mitigate the risk of overshooting and buying in at a peak," he said.