Ninepoint Partners Files Prospectus for SpaceX HighShares ETF

Ninepoint Partners LP has filed a preliminary prospectus with Canadian regulators to launch a new single-stock exchange-traded fund (ETF) focused on SpaceX, the aerospace company founded by Elon Musk [2]. The proposed fund, titled the Ninepoint SpaceX HighShares ETF, would trade under the ticker symbol SXHI and carries a management fee of 0.29% [2].

Key takeaways

• The proposed Ninepoint SpaceX HighShares ETF (SXHI) is subject to regulatory approval and will only begin trading following the completion of SpaceX’s initial public offering (IPO) [2].
• The fund intends to employ a covered call strategy and use cash borrowing on up to 33% of its unlevered net asset value to target capital appreciation and monthly income [2].
• Ninepoint’s filing follows a similar move by Harvest Portfolios Group Inc., which also filed a preliminary prospectus for a SpaceX-focused ETF [2].
• The ETF is expected to be a qualified investment for various Canadian registered plans, including RRSPs, TFSAs, and RESPs, pending final prospectus receipt [1].

Strategy and Market Context

The proposed SXHI fund aims to provide investors with exposure to SpaceX once the company goes public [2]. According to John Wilson, co-CEO and chief investment officer at Ninepoint, the firm developed the product in response to investor demand for a professionally managed way to participate in the anticipated listing [2]. The fund’s methodology mirrors Ninepoint’s existing HighShares platform, utilizing a combination of covered calls and modest leverage to manage portfolio risk and generate potential income [2].

The race to offer SpaceX-related investment products in Canada has intensified as the company remains private but continues to generate significant interest in the asset management sector [2]. Harvest Portfolios Group Inc. also recently filed for a SpaceX-focused ETF, which proposes a 0.4% management fee and a 25% leverage strategy [2]. While these funds await the company's IPO, other space-themed ETFs have already launched in Canada and the United States, with some thematic funds attracting US$1.3 billion in new cash over a recent one-month period [2].

Why it matters

The filings represent a broader effort by Canadian asset managers to address what they describe as a gap in efficient investor access to the space and satellite industry [2]. Projections from the World Economic Forum and McKinsey & Company suggest the global space economy could reach a value of US$1.8 trillion by 2035, fueling interest in the sector [2].

However, investors should note that these funds are currently in the preliminary stages. Ninepoint has emphasized that the prospectus is subject to completion or amendment, and no sales can occur until a final prospectus receives regulatory approval [1]. Furthermore, the funds are subject to market risks, and there is no guarantee that the ETFs will achieve their stated objectives or provide consistent distributions [1]. Prospective investors are encouraged to review the full prospectus for a complete description of the risks associated with these investments [3].