SpaceX Nears Entry into the Nasdaq-100, Raising Hopes for a Rebound in Struggling Space ETFs

[Financial News] As SpaceX moves closer to inclusion in the Nasdaq-100 (NDX), expectations are growing for a rebound in domestic space and aerospace exchange-traded funds (ETFs). Although the sharp drop in share prices after listing pushed returns on local space ETFs into negative territory across the board, analysts say a large inflow of passive funds and improving sentiment toward the space industry could provide a new catalyst for gains.
According to the investment banking industry on the 7th, SpaceX will officially be added to the Nasdaq-100 before the U.S. stock market opens on the 7th local time. As a result, mechanical buying by global index funds and ETFs that track the Nasdaq-100 is expected to accelerate.
The Nasdaq-100 is a leading U.S. technology stock index by market capitalization. SpaceX will be added to the index less than a month after its Nasdaq listing on the 12th of last month. It is a representative example of the fast-track system introduced by Nasdaq for large initial public offerings (IPOs).
Market watchers estimate that the inclusion could attract as much as $22 billion to $27 billion in passive funds. In QQQ, the flagship ETF, buying demand alone is expected to reach about $4.3 billion.
Domestic asset managers are also raising expectations. Local ETFs that currently hold a large weighting in SpaceX include Korea Investment Management's ACE US Space Tech Active ETF, Samsung Asset Management's KODEX US Aerospace ETF, Mirae Asset Global Investments' TIGER U.S. Space Tech ETF, and Shinhan Asset Management's SOL U.S. Space Aerospace TOP10.
However, these ETFs were hit hard by SpaceX's sharp post-listing decline. As of the 6th, their returns over the past month were -18.06% for ACE US Space Tech Active ETF, -15.22% for KODEX US Aerospace ETF, -31.24% for TIGER U.S. Space Tech ETF, and -17.94% for SOL U.S. Space Aerospace TOP10.
SpaceX surged to as high as $225 intraday right after listing, but later fell to around $150, showing high volatility. The decline followed profit-taking after the company announced plans last month to issue $20 billion in corporate bonds.
Securities analysts say there is still room for further gains after the short-term correction. According to financial data provider TipRanks, the average analyst target price for SpaceX is $210.86, about 30% above the current share price.
An industry official said, "Domestic space ETFs have a high exposure to SpaceX, so the stock's direction largely determines ETF returns." The official added, "Large passive fund inflows from the Nasdaq-100 inclusion could have a positive effect on investor sentiment in the short term."
nodelay@fnnews.com Park Ji-yeon Reporter