The race for SpaceX ETFs in Canada is on

Space Exploration Technologies Corp. (SpaceX) has yet to go public, but hype around the company’s anticipated IPO is intensifying in the asset management world.  

On Thursday, Harvest Portfolios Group Inc. (Harvest ETFs) said it filed a preliminary prospectus with regulators to launch a new ETF that invests in the American space, telecommunications and AI company founded and primarily owned by Elon Musk. And on Friday, Ninepoint Partners LP announced that it has done the same.

The proposed single-stock Harvest SpaceX Enhanced High Income Shares ETF would seek to capitalize on the growth potential of the space and satellite company. It also would apply 25% leverage, which can magnify both gains and losses, and an active covered call strategy, aimed at generating enhanced monthly income. 

The fund, which would be listed with the ticker symbol SPXE and have a 0.4% management fee, is expected to begin trading following SpaceX’s IPO, subject to TSX approval. 

In a written statement, Harvest ETFs president and co-chief investment officer Paul MacDonald said the firm is seeking to launch the new fund because it feels that Canadian investors have had “limited efficient access” to SpaceX, noting that it believes “the long-term growth potential of the aerospace and space infrastructure sector merits a part of a diversified portfolio.” 

The global space economy is projected to be worth US$1.8 trillion by 2035, according to the World Economic Forum and McKinsey & Company.

“We identified meaningful investor interest in the space industries and believe the proposed fund structure is a way to help address a genuine gap in the Canadian market,” MacDonald added. 

The fund would join Harvest’s suite of single-stock ETFs and leverage the firm’s “established expertise in options-based income strategies across its ETF lineup,” he said.  

Ninepoint’s proposed single-stock SpaceX HighShares ETF, which would be listed with the ticker symbol SXHI and a 0.29% management fee, is also expected to begin trading following the completion of SpaceX’s IPO, subject to TSX approval. 

SXHI would similarly use a covered call strategy and employ cash borrowing on up to 33% of its unlevered net asset value in an effort to enhance both income and growth potential, the firm said in a release. 

“SpaceX is one of the most anticipated public listings of this generation, and Canadians have told us they want a familiar, professionally managed way to participate when it comes to market,” said John Wilson, co-CEO, managing partner and chief investment officer at Ninepoint, in the release.  

“With the Ninepoint SpaceX HighShares ETF, we are applying the same disciplined covered call and modest-leverage methodology that powers our Ninepoint HighShares platform to deliver the potential for capital appreciation and high monthly income.” 

The news comes just weeks after Global X Investments Canada Inc. launched an ETF that seeks to capitalize on advancements and growth in the global space economy. That ETF tracks the Global X Space Tech Index, which a company spokesperson told Advisor.ca is anticipated to include SpaceX, following its IPO.

Space-related ETFs have also been taking off in the U.S. in recent weeks, including the US$2.3-billion Tema Space Innovators ETF (NYSE: NASA), US$26.8-million VanEck Space ETF (Nasdaq: WARP) and US$96.2-billion Roundhill Space & Technology ETF (Cboe BZX: MARS).

Citing Morningstar Direct data, Reuters recently reported that these thematic funds have attracted US$1.3 billion in new cash in the last month alone, with total assets under management in the segment reaching US$3.3 billion.