ETF issuers are racing to capitalize on investor enthusiasm for SpaceX following its record-breaking initial public offering, with new leveraged single-stock funds set to hit the market next week. Themes ETFs will launch the Leverage Shares 2X Long SpaceX Daily ETF (ticker: SPCH) and the Leverage Shares 2X Short SpaceX Daily ETF (ticker: SSPC) on Monday, according to a company announcement.
The actively managed funds will use swaps, options and other derivatives to deliver daily returns of 200% and negative 200% of SpaceX's stock performance, respectively, before fees and expenses. Paul Marino, chief revenue officer at Themes ETFs, described the IPO as "the largest in the history of the world" and noted "incredible demand from retail investors to get exposure to SpaceX."
SpaceX raised $75 billion by selling 555.56 million shares in its IPO, easily surpassing Saudi Aramco's $25.6 billion listing in 2019. The offering has ignited a wave of product development among ETF providers seeking to tap into retail appetite for high-profile, previously private companies.
ProShares has filed for the Ultra SpaceX ETF (ticker: SPCF), which also targets 2x daily returns of the rocket maker. Defiance ETFs has similarly proposed the Defiance Daily Target 2X Long SpaceX ETF. These funds join a growing roster of single-stock ETFs that allow investors to magnify exposure to individual equities without using margin or options directly.
The rush to launch SpaceX-linked ETFs comes amid a broader boom in space-themed investing. Several space-focused ETFs have seen inflows this year, fueled by the industry's expansion and the attention surrounding the SpaceX IPO. Advisors should note that leveraged single-stock ETFs are designed for short-term trading and can suffer from volatility decay over longer holding periods.
For financial advisors, the proliferation of these products raises questions about suitability and client education. State Street has advocated for sector ETF diversification over single-stock funds, while ERShares CEO rejected $400 million in inflows to protect investors in its XOVR fund ahead of the IPO. The new leveraged ETFs from Themes ETFs, ProShares and Defiance will require careful monitoring of daily rebalancing and compounding effects.
Marino emphasized that the funds provide an efficient way for retail investors to gain leveraged exposure to SpaceX, but cautioned that they are not suitable for buy-and-hold strategies. The ETFs will rebalance daily to maintain their target leverage ratios, which can lead to significant tracking error over extended periods.
The launch of these products underscores the growing intersection of private-market giants and public ETF structures. As more high-profile companies like SpaceX, OpenAI and Anthropic approach public markets, advisors can expect continued innovation in single-stock and thematic ETFs. Advisors are already weighing entry timing and valuation risks for these upcoming IPOs.
SpaceX's IPO has also spurred activity in the wealth management space, with employee groups seeking sub-0.5% fee structures and tax strategies ahead of the listing. The new leveraged ETFs offer another avenue for exposure, but advisors should ensure clients understand the risks before allocating capital.
