[DigitalToday reporter Sangyeob Oh (오상엽)] South Korean space-themed exchange-traded funds (ETFs) have repeatedly adjusted their schedules for including SpaceX ahead of its listing. Large funds flowed into related ETFs on expectations for a SpaceX listing, but managers changed inclusion and disclosure schedules just before the listing. Investors are now in a position where they need to check the actual inclusion timing and weight by product.

According to the financial investment industry on June 12, SpaceX is set to list on the U.S. Nasdaq market on Thursday local time. South Korea's space and aerospace ETF market has grown quickly alongside expectations for the listing, with the number of related domestic ETFs rising to 9.

At the start of the year, the only ETF focused on investing in U.S. space tech was Hana Asset Management's 1Q ETF. Ahead of the SpaceX listing, products focused on the United States and space were launched one after another. In April alone, 3 products were listed: TIGER US Space Tech ETF, ACE US Space Tech Active ETF and SOL US Aerospace TOP10.

Among them, TIGER US Space Tech ETF and ACE US Space Tech Active ETF have emerged as the leading products in South Korea's space ETF market. The two products posted outperformance compared with the U.S. flagship space ETF, the UFO ETF. They also outperformed the NASA ETF, which secured more than a 10 percent weight in a SpaceX special purpose vehicle (SPV).

Until they directly include SpaceX, the two products took a structure aimed at indirect benefits through space industry-related stocks. ACE US Space Tech Active ETF held a high 25.6 percent weight in EchoStar, which holds a stake in SpaceX. It also allocated 21.4 percent to Rocket Lab, concentrating investment in the two stocks.

TIGER US Space Tech ETF had its highest weight in Rocket Lab at 25 percent. It included Intuitive Machines at 18.9 percent, Redwire at 17 percent, AST SpaceMobile at 10.9 percent, Planet Labs at 7.3 percent and EchoStar at 5.7 percent.

Korea Investment Management on June 4 became the first South Korean asset manager to disclose a plan to participate in SpaceX's initial public offering (IPO). But on Thursday it postponed its schedule to provide guidance on ACE US Space Tech Active ETF's participation in the SpaceX IPO.

It had planned to disclose the allotted amount in the SpaceX IPO and the scale of the ETF inclusion. It decided instead to provide guidance within a range that can be confirmed after filings with the U.S. Securities and Exchange Commission (SEC), citing official disclosure procedures and requests to comply with confidentiality.

Mirae Asset Management also posted a notice on its website on Wednesday afternoon announcing a change to the rebalancing schedule for TIGER US Space Tech ETF. It deleted the post about an hour later.

That was because the index provider decided, after consulting with market participants, not to proceed with the previously reviewed change to an ad hoc rebalancing schedule. Concerns about a supply-demand burden and possible market shocks in the early stage of the SpaceX listing were also cited as having had an impact, it was reported.

In the end, Mirae Asset Management dropped plans to include SpaceX on the listing day for TIGER US Space Tech ETF. It decided to include the stock at the point of 2 trading days after listing (T+2) under the existing approach. TIGER US Space Tech ETF is reported to have drawn inflows of 1.9921 trillion won over the past month.

This has led to criticism that investors in South Korean space ETFs need to check not only the SpaceX listing itself but also the actual inclusion timing and inclusion weight of each product.

Even among space-themed ETFs, short-term returns can differ depending on whether the fund includes the stock on the listing day, when it includes it after listing and the weight of indirect beneficiaries in the existing portfolio.

If the share price jumps sharply right after listing, products that include it quickly could see improved returns. On the other hand, if volatility rises versus the IPO price or profit-taking emerges, the earlier the inclusion timing, the heavier the volatility burden could be.

In the financial investment industry, there is a view that investing based only on short-term share price moves right after the SpaceX listing is a heavy burden. There is criticism that investors should also look at the first-day share price versus the IPO price, inclusion timing by ETF, inclusion weight and management approach.

An asset management industry official said, "SpaceX is a stock where expectations for growth in the space industry and the Musk premium are reflected at the same time, so there is bound to be strong interest in the early stage of listing." The official added, "But ETF investors should check when and how much the product holds SpaceX, and should also consider the possibility of heightened short-term volatility."