Analyst: Market Could See 'Excluding SpaceX' Index ETF, but Demand Expected to be Limited

June 1 – Bloomberg Senior ETF Analyst Eric Balchunas says some market participants have proposed an S&P 500 index exchange-traded fund that excludes SpaceX shares—dubbed the S&P 500 ex-SpaceX—but he believes such a product would likely elicit only limited investor interest if launched. Balchunas notes roughly 24 SpaceX-linked ETFs are already available in the market, arguing demand for an "ex-SpaceX" strategy is overestimated. He explains that controversy around SpaceX is limited to a small group of social media users, not mainstream investors. Additionally, Balchunas points out that a previous S&P 500 index ETF excluding tech stocks never gained widespread traction after its launch. Going forward, if SpaceX goes public, short or inverse ETFs tied to the company could also hit the market, allowing investors to hedge against related risks, he adds. To illustrate his point, Balchunas uses Tesla as an example: Tesla’s stock rose roughly 65% in its first year post-IPO, so a future SpaceX IPO may similarly generate positive returns for index investors, he concludes.