Korea Investment Management to Join SpaceX IPO, Allocate Shares to Space ETF and Fund

Korea Investment Management said on June 4 it will participate in the SpaceX initial public offering ahead of the company's June 12 listing.

The shares allocated through the IPO will be distributed to the ACE U.S. Space Tech Active exchange-traded fund and the Korea Investment Global Space Technology & Defense Fund, both managed by the firm.

Korea Investment Management also plans additional purchases on the listing day. The ACE U.S. Space Tech Active ETF aims to raise its SpaceX weighting to as much as 25% through its IPO allocation and additional buying on the debut.

Investors will be able to check SpaceX's weighting in the ACE U.S. Space Tech Active ETF on the ACE ETF website and other channels after June 13. The weighting in the Korea Investment Global Space Technology & Defense Fund will be disclosed later through the fund's asset management report.

Kim Hyun-tae, head manager in the Global Quant Management Department, said both products can respond immediately on SpaceX's listing day because they are actively managed. That sets them apart from passive products, which seek to fully replicate an index and therefore cannot easily add SpaceX before it is included in the benchmark.

Kim added that another feature of the two funds is their holding in EchoStar, which the firm described as a proxy asset for SpaceX. If buying demand tied to an early inclusion in the Nasdaq 100 increases volatility in SpaceX shares, EchoStar could help ease the risks of overshooting and buying at elevated levels.

Lee Su, Hankyung.com reporter 2su@hankyung.com