Latest / The Bear Market Podcast with Fexingo: Surviving Downturns, Buying the Dip, and Long-Term Resilience / How the SpaceX IPO Is Reshaping Retail ETF Access
Transcript
- Lucas: So two months, $2.6 billion. That's the headline from a CNBC finance story yesterday about the NASA ETF. Luna: The NASA ETF — that's the one that holds a stake in private companies like SpaceX, right? Lucas: Exactly. It's a closed-end fund that uses a structure to give retail investors exposure to pre ipo companies. And $2.6 billion in two months is a staggering inflow for a niche product. Luna: I remember when it launched last year, it was a novelty. Now it's one of the hottest tickets in the ETF space. Lucas: And the timing is interesting. Because look at the broader market backdrop today, May 30, 2026. The S&P 500 at 7,580, up 1.4% in the last five days. The VIX down to 15.32, which is a 7.7% drop in the same period. Luna: Low volatility, rising markets. That's the kind of environment where investors get comfortable reaching for yield—or in this case, reach for growth. Lucas: Right. And the yield curve is steepening again. The 10-year at 4.45%, the 2-year at 3.99%. That's a 46 basis point spread. A positive, steepening curve historically favors risk-on behavior. Luna: So you're saying the macro is actually encouraging this kind of speculative appetite? Lucas: Partly. But I think there's something more structural here. The NASA ETF is really a test case for a new type of retail access. Remember when SPACs were supposed to democratize private equity? That didn't end well. Luna: Yeah, SPACs collapsed after 2021. But this ETF is different—it's not a blank check. It's a portfolio of actual private companies that the fund manager sources and holds. Lucas: Right. And the key feature is that it provides daily liquidity to investors, even though the underlying assets are illiquid. That's the innovation—and the risk. Luna: How does that work mechanically? Don't you get a disconnect between the NAV and the market price? Lucas: That's exactly the concern. The fund uses a structure where the market price can deviate from net asset value. In fact, it's traded at a premium as high as 30% above NAV during the recent SpaceX IPO hype. Luna: So you're paying a 30% markup for the privilege of owning a piece of the ETF that owns a piece of SpaceX. That's a lot of hope built into the price. Lucas: It is. But so far the inflows have sustained that premium. The question is what happens when the SpaceX IPO actually happens. If the stock pops, the ETF might re-rate. If it flops, the premium could vanish overnight. Luna: And that's where the VIX matters. Low vol environment encourages this behavior, but a spike in volatility could trigger a rush for the exits. Lucas: Exactly. If the VIX jumps back above 20, the first thing to get sold is anything with a premium. And the NASA ETF would be a prime candidate. Luna: But let's not forget the demand side. Retail investors are clearly hungry for access to names like SpaceX. The $2.6 billion in two months proves that. Lucas: It's a generational brand. SpaceX is probably the most anticipated IPO since Uber or maybe even Facebook. And retail has been shut out of the pre ipo market for decades. That's why this ETF resonates. Luna: So is this the beginning of a trend? Are we going to see more ETFs that bundle private companies? Lucas: I think we will. There are already filings for similar products focused on fintech startups and AI companies. The SEC has been cautious, but the NASA ETF's success might open the floodgates. Luna: But that also means more complexity, more liquidity mismatches. If we get a wave of these, the systemic risk could grow. Lucas: It's a classic market evolution story. New products emerge, they attract capital, then someone finds the flaw. The question is whether regulators step in before or after the flaw is exposed. Luna: And speaking of the macro, the Russell 2000 is up 1.7% in the last five days, to 2,919. Small caps are rallying, which fits the risk-on narrative. Lucas: That's a good point. The small-cap rally we've been talking about in recent episodes is another sign that investors are moving down the market-cap ladder, looking for growth beyond mega-cap tech. Luna: And the NASA ETF is kind of the extreme version of that — going below even small caps, into private companies. Lucas: Exactly. It's a spectrum. At one end, you have the S&P 500 at 7,580. At the other, you have SpaceX. And retail is piling in at every level. Luna: If today was actually useful to you, the way these stay ad-free is listener support — you can contribute at buy me a coffee dot com slash fexingo. Lucas: Yeah, it's a small gesture that keeps us independent and focused on the numbers, not the sponsors. Luna: And it really does make a difference. So if you're finding value here, that's the link. Lucas: Alright, back to the ETF. One more thing I want to flag: the SEC is reportedly reviewing the valuation methodologies of these private-market ETFs. If they tighten the rules, the premium could compress. Luna: That's a regulatory overhang. But if the SpaceX IPO happens before any new rules, the momentum could carry through. Lucas: Right. So the near-term catalyst is the IPO itself. If it comes in the next few months, the ETF could see another leg up. If it gets delayed, the hype might fade. Luna: And what about the broader portfolio? The ETF doesn't just hold SpaceX, right? Lucas: No, it holds maybe 20 to 30 private companies in the space and defense sector. But SpaceX is the crown jewel, probably 10% to 15% of the portfolio. The rest are smaller names. Luna: So essentially, you're buying a basket of private space stocks with one big bet on SpaceX. If SpaceX succeeds, the whole fund benefits. Lucas: That's the thesis. And the market is buying it. Two months, $2.6 billion. It's a bold experiment in retail access. Luna: And one worth watching closely, especially if the VIX starts to creep up. Lucas: For now, the VIX is low, the yield curve is steep, and retail is hungry. That's a recipe for more innovation—and more risk. Luna: I think we'll be coming back to this one. Thanks, Lucas. Lucas: Thanks, Luna. See you next time.