As SpaceX's initial public offering (IPO) approaches, asset management firms in South Korea are accelerating their preparations. Korea Investment Trust Management has announced plans to include shares from the IPO in exchange-traded funds (ETFs) and public funds, while industry experts emphasize that the focus should be on the allocation amount rather than mere participation in the IPO.
According to the financial investment industry on June 5, with SpaceX set to list on the Nasdaq on June 12, Mirae Asset Securities is participating in the IPO underwriting and is soliciting investment demand from domestic institutional and professional investors. Other asset management firms are also working to secure shares. Multiple industry insiders reported receiving guidance from Mirae Asset Securities regarding SpaceX investments and are currently considering their participation.
Korea Investment Trust Management has become the first domestic firm to publicly announce its plans to participate in the SpaceX IPO. The shares allocated through the IPO will be included in the ACE U.S. Space Tech Active ETF and the Korea Investment Global Space Technology & Defense Fund. Additionally, the firm plans to purchase more shares on the listing day to increase the ETF's allocation to as much as 25%.
However, industry experts point out that investors should pay attention to a different aspect. The actual amount of shares secured is more critical than simply receiving shares from the IPO. A financial industry insider stated, "Participation in the IPO and actual allocation are entirely different matters," adding that, given the massive interest from global institutional investors, the actual allocation could be significantly lower than the requested amount.
For an ETF to include SpaceX at a meaningful level, a substantial amount of shares must be secured. For instance, an ETF with net assets of 100 billion won would need to hold about 25 billion won worth of SpaceX shares to achieve a 25% allocation. If the IPO allocation is only in the tens of billions, a significant portion would need to be purchased in the market after the listing.
Ultimately, the ETF's returns could vary based on the amount of shares secured during the IPO. Typically, large IPO stocks often trade above their initial offering price shortly after listing, making it advantageous to have a larger allocation at the IPO price.
There are also differences based on management style. The ACE U.S. Space Tech Active ETF, managed by Korea Investment Trust Management, can include SpaceX immediately after its listing due to its active management approach. In contrast, passive ETFs face a more complex situation.
Passive ETFs are generally required to track a benchmark index. Since SpaceX is not yet included in a foundational index, actively including IPO shares could conflict with management principles.
Another issue is the ETF disclosure system. Unlike typical market purchases, there may be a time lag between the inclusion of IPO shares and the disclosure of that information.
Some industry insiders have raised concerns that investors may find it difficult to immediately verify their actual holdings during this process. While ETFs have maintained high transparency through daily portfolio disclosures and real-time estimated net asset values (iNAV), discrepancies in information could arise depending on the timing of IPO disclosures.
One industry insider remarked, "Many asset managers will want to include SpaceX, but ultimately, what matters is how cheaply and how much they can secure. The actual allocation percentage disclosed after the listing will be the benchmark for each product's competitiveness."
* This article has been translated by AI.
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