Musk-Focused ETF Puts Retirement Money Into SpaceX and Tesla 25% Each

Interest is rising in SpaceX after the U.S. space company posted its first quarterly profit since listing and speculation over a merger with Tesla gathered pace. That is drawing attention to KB Asset Management’s RISE US Space & Robot TOP2 US Treasury Mixed 50 exchange-traded fund, which holds both companies.

KB Asset Management said the ETF, which listed on July 14, allocates 25% each to SpaceX and Tesla. The remaining 50% is spread across eight U.S. Treasury ETFs with remaining maturities of three years or less. The fund had net assets of $25.8 million as of Oct. 27.

SpaceX announced on Oct. 20 that third-quarter revenue jumped 161% from a year earlier to $14.6 billion and net income reached $4.4 billion. It marked the company’s first quarterly profit since listing. On the earnings conference call, Chief Executive Officer Elon Musk said Tesla and SpaceX had each formed independent committees to review a merger.

The product is also a bond-mixed ETF, meaning investors can put up to 100% of their retirement pension accounts into it. Retirement pension accounts can hold only up to 70% in risky assets, but bond-mixed ETFs with equity exposure of 50% or less are classified as safe assets. As of Oct. 27, the fund’s holdings were 25.51% in Tesla and 22.38% in SpaceX. The total annual fee is 0.13%.

Yuk Dong-hwi, head of ETF Product Marketing at KB Asset Management, said market interest in the two companies is increasing after SpaceX returned to profit and news emerged that Tesla and SpaceX were reviewing a merger. He added that the fund could be an alternative for investors seeking exposure to growth industries while reducing portfolio volatility by combining leading growth stocks with short-term U.S. Treasuries.

Park Ju-yeon, Hankyung.com reporter grumpy_cat@hankyung.com