SpaceX's early inclusion in the Nasdaq 100, a benchmark index of leading U.S. technology stocks, has raised expectations that domestic aerospace exchange-traded funds (ETFs), which have recently struggled, may find a turning point for a rebound. With global passive funds tracking the Nasdaq 100 and Russell 1000 expected to flow in on a large scale, investor sentiment across the space industry is projected to shift.
According to the financial investment industry Sunday, SpaceX will be officially added to the Nasdaq 100 index that day. The inclusion is a prominent case of the "Fast Entry" system that Nasdaq introduced this year. The system allows a large newly listed company that meets certain requirements and ranks among the top by market capitalization to be added to the index early, without waiting for the regular rebalancing period.
The market expects large-scale passive fund inflows to support SpaceX's share price. The global assets under management (AUM) tracking the Nasdaq 100 amount to about $800 billion (approximately 1,220 trillion won). ETF.com, citing JPMorgan estimates, projected that mechanical buying of about $4.3 billion (approximately 6.6 trillion won) would occur in Invesco QQQ alone. Combining funds tracking both the Nasdaq 100 and the Russell 1000, the scale of passive buying tied to the index inclusion is estimated to reach up to 41.2 trillion won.
The index inclusion is drawing attention because SpaceX has shown extreme share price volatility since its listing. After debuting on the Nasdaq market at an offering price of $135 on Nov. 12, SpaceX soared to as high as $225.64 intraday before pulling back to $147.11, repeatedly swinging sharply. In particular, investor sentiment weakened after the company announced a plan on Nov. 22 to issue $20 billion in corporate bonds to repay debt, and on Saturday it closed at $160.42, down 0.98% from the previous session.
Domestic space ETFs that hold SpaceX as a major component also could not escape the slump. According to ETF CHECK, as of that day, the one-month return of TIGER US Space Tech was the weakest at -35.45%, while ACE US Space Tech Active (-22.60%) and KODEX US Aerospace (-20.04%) also posted double-digit declines. By contrast, WON US Aerospace & Defense, which does not include SpaceX, recorded a one-month return of 2.25%, faring relatively well.
Asset managers are also rolling out new products one after another to meet rising demand for space industry investment. Kiwoom Asset Management listed "KIWOOM US Space Tech TOP2 Bond Mixed 50" that day. The product is a bond-mixed ETF that invests 25% each in SpaceX and Rocket Lab, with the remaining 50% invested in domestic short-term government bonds and monetary stabilization bonds. It is designed with reduced volatility so that it can also be used in pension accounts.
However, some in the industry say it is too early to expect too much from the index inclusion effect. "As this was an event the market had already anticipated, it is possible that much of it has been reflected in the share price," an industry official said. "The scale of initial passive fund inflows may also be more limited than the market expects."
