Space Exploration Technologies Corp. (SpaceX)\u00a0has yet to go public, but hype around the company\u2019s\u00a0anticipated\u00a0IPO is intensifying\u00a0in the asset management world.\u00a0\u00a0<\/p>\n
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.<\/p>\n
The proposed\u00a0single-stock\u00a0Harvest SpaceX Enhanced High Income Shares ETF\u00a0would\u00a0seek\u00a0to\u00a0capitalize on the growth potential of the space and satellite company. It also\u00a0would\u00a0apply\u00a025%\u00a0leverage, which\u00a0can magnify both gains and\u00a0losses,\u00a0and an active covered call\u00a0strategy,\u00a0aimed at\u00a0generating\u00a0enhanced monthly income.\u00a0<\/p>\n
The fund, which would be listed with the ticker symbol SPXE\u00a0and have a 0.4% management fee, is expected to begin trading following SpaceX\u2019s IPO, subject to\u00a0TSX approval.\u00a0<\/p>\n
In a written statement, Harvest ETFs president and co-chief investment officer Paul MacDonald said the firm is seeking to launch the new\u00a0fund\u00a0because it feels that Canadian investors have had \u201climited efficient access\u201d to SpaceX, noting that it believes \u201cthe long-term growth potential of the aerospace and space infrastructure sector merits a part of a diversified portfolio.\u201d<\/p>\n
The global space economy is projected to be worth US$1.8 trillion by 2035<\/a>, according to the World Economic Forum and McKinsey & Company.<\/p>\n \u201cWe 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,\u201d\u00a0MacDonald added.\u00a0<\/p>\n The fund would join\u00a0Harvest\u2019s\u00a0suite of\u00a0single-stock\u00a0ETFs\u00a0and\u00a0leverage\u00a0the firm\u2019s \u201cestablished expertise in options-based income strategies across its ETF lineup,\u201d he said.\u00a0\u00a0<\/p>\n Ninepoint\u2019s proposed single-stock SpaceX\u00a0HighShares\u00a0ETF, which would be listed with the ticker symbol SXHI and a 0.29% management fee,\u00a0is also expected to begin trading following the completion of SpaceX\u2019s\u00a0IPO, subject to TSX approval.\u00a0<\/p>\n SXHI would\u00a0similarly\u00a0use\u00a0a covered call strategy and employ\u00a0cash borrowing on up to 33% of its unlevered net asset value\u00a0in an effort\u00a0to enhance both income and growth potential, the firm said in a\u00a0release.\u00a0<\/p>\n \u201cSpaceX 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,\u201d said John Wilson,\u00a0co-CEO,\u00a0managing\u00a0partner and\u00a0chief\u00a0investment\u00a0officer\u00a0at\u00a0Ninepoint, in the release.\u00a0\u00a0<\/p>\n \u201cWith the\u00a0Ninepoint\u00a0SpaceX\u00a0HighShares\u00a0ETF, we are applying the same disciplined covered call and modest-leverage methodology that powers our\u00a0Ninepoint\u00a0HighShares\u00a0platform to deliver the potential for capital appreciation and high monthly income.\u201d\u00a0<\/p>\n