XOVR ETF Expands SpaceX Investment with Additional $13M, Raising Position to 11% of AUM

Rhea-AI Summary

XOVR ETF has increased its investment in SpaceX by $13 million, bringing SpaceX's total allocation to 11% of AUM. The fund, managed by ERShares, is the only ETF providing exposure to private equity and focuses on entrepreneurial U.S. large-cap companies using the ER30TR Index.

The fund's investment strategy is based on ERShares' Proprietary Venture Capital Model, developed by CEO/CIO Dr. Joel Shulman. The company strongly refuted recent WSJ claims about SpaceX's share price range and potential trading strategies, calling them misguided and demonstrating a lack of understanding of private equity markets.

XOVR ETF aims to democratize access to private equity for retail investors, offering opportunities historically reserved for accredited investors. The fund utilizes the ER30TR Index for over 85% of its weight, focusing on Entrepreneurial US Large Cap companies.

Positive

• Increased investment in SpaceX by $13M, showing strong conviction in the position
• SpaceX represents 11% of AUM as the fund's largest holding
• Unique market position as the only ETF providing private equity exposure
• Fund utilizes ER30TR Index for 85%+ of weight, competing with major benchmarks

Negative

• None.

Insights

ETF & Private Markets Specialist

The $13M increase in SpaceX allocation by XOVR ETF marks a pivotal moment in democratizing private market access. This strategic move, elevating SpaceX to 11% of AUM, carries several significant implications for investors and the broader market landscape.

The fund's positioning reveals a sophisticated arbitrage opportunity between public and private markets, potentially offering retail investors exposure to high-growth private companies at valuations different from traditional late-stage private rounds. This creates an interesting dynamic where retail investors can participate in private market opportunities through a liquid, regulated vehicle.

The public disagreement over SpaceX valuation methodologies highlights a critical challenge in private market investing. Dr. Shulman's strong rebuttal of the WSJ's pricing suggestions underscores the complexity of private market valuations and the limitations of simplified trading strategies. This tension between public market price discovery mechanisms and private market valuation methodologies could create both opportunities and risks for investors.

XOVR's approach, focusing on entrepreneurial companies through their proprietary ER30TR Index, represents an innovative evolution in ETF strategies. The fund's heavy weighting towards SpaceX signals strong conviction but also introduces concentration risk that investors should carefully consider. The fund's ability to identify early opportunities, exemplified by their early recognition of the Magnificent 7, suggests a robust investment process, though past performance doesn't guarantee future success.

Investment Product Strategist

This development represents a significant evolution in ETF product design, introducing a hybrid investment vehicle that bridges the traditional gap between public and private markets. The 11% allocation to SpaceX demonstrates both the fund's conviction and its ability to execute on its unique mandate.

The product structure addresses a important market inefficiency by providing retail investors access to private equity opportunities through a regulated, liquid vehicle. This innovation could potentially reshape how retail investors access private markets, though it comes with unique challenges in portfolio management and valuation.

The public dispute over valuation methodologies highlights the complexities of incorporating private assets into public market vehicles. The fund's approach to valuation and position sizing will be important for maintaining investor confidence and regulatory compliance. The strong stance against simplified trading strategies for price discovery indicates a sophisticated understanding of private market dynamics.

XOVR's success in identifying early opportunities, combined with its proprietary Entrepreneur Factor Model, suggests a robust investment process that could provide meaningful differentiation in an increasingly crowded ETF marketplace. However, the concentrated position in SpaceX introduces specific risks that investors need to evaluate within their portfolio context.

NEW YORK, Jan. 31, 2025 /PRNewswire/ -- The XOVR ETF by ERShares, the only exchange-traded fund providing exposure to private equity, has further strengthened its position in SpaceX, the fund's largest holding. The fund increased its investment by $13 million, bringing SpaceX's total allocation to 11% of AUM.

XOVR ETF is uniquely designed to invest in entrepreneurial U.S. large-cap companies, leveraging the ER30TR Index (Entrepreneur Total Return Index), which is based on ERShares' Proprietary Venture Capital Model. The model was developed over the past 20 years by Dr. Joel Shulman, CEO/CIO of ERShares. Dr. Shulman, an early identifier of today's Magnificent 7, is now focused on uncovering the next generation of disruptive companies, sometimes investing pre-IPO.

"XOVR ETF is democratizing access to private equity for retail investors," said Eva Ados, COO and Chief Investment Strategist at ERShares.

In a recent CNBC interview, Ados added: "We have been evaluating companies like OpenAI, Scale AI, and other popular AI names, but we invest based on conviction, not hype. Because it's still early in the AI race and there are still many unknowns, we don't just jump into names, unlike some other funds. We have high conviction that SpaceX and Starlink are positioned to be the dominant forces in space exploration and global connectivity."

Given this, Shulman states "We have no plans to alter SpaceX's position as our top holding anytime soon. It remains our largest investment, not because of fleeting popularity, but because we build positions in companies that redefine industries."

The fund has already gained strong media attention, including a WSJ article citing SpaceX's share price range from $115.50 to $209.51. The article further quoted an industry analyst suggesting that XOVR ETF could trade small portions of its SpaceX stake intermittently to publish resulting prices.

Dr. Shulman strongly refutes both claims, calling them misguided and lacking a fundamental understanding of private equity markets:

"We recently increased our SpaceX investment by $13M, and the pricing range quoted by WSJ is a gross misrepresentation of current market conditions. Making conclusions based on incomplete or outdated data is not just misleading, it is naïve and demonstrates a lack of thorough research."

"Any suggestion to 'buy and sell a little bit of private equity each day' as a pricing strategy is not only impractical but fundamentally flawed. This idea reflects a superficial grasp of how private markets operate and ignores the complex nature of private equity valuation. Such a proposal is simplistic at best and entirely unworkable in practice."

He further emphasizes XOVR ETF's mission to level the playing field by offering retail investors access to private equity opportunities historically reserved for accredited investors.

"Our goal is to provide retail investors with the same opportunities, pari passu, as institutional players—something that has historically been out of reach," Shulman adds.

ERShares has pioneered the Venture Capital Model for public markets, applying its Entrepreneur Factor, a proprietary methodology for identifying and investing in the most innovative companies.

XOVR ETF utilizes the ER30TR Index for 85%+ of the Fund's weight. This index holds Entrepreneurial US Large Cap companies and rivals major benchmarks like the QQQ and Russell 1000 Growth.

About ERShares

ERShares is a leader in entrepreneur-focused investing, using a proprietary Entrepreneur Factor Model to identify high-growth opportunities. Through its innovative approach, ERShares provides public market investors access to venture-capital-style investments, bridging the gap between institutional and retail investing.

Visit www.ershares.com

Past performance is no guarantee of future results. All investments involve risk. Please refer to the following disclosures: https://entrepreneurshares.com/disclosures/.

Distributed by Vigilant Distributors, LLC.

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SOURCE ERShares

FAQ

How much did XOVR ETF increase its SpaceX investment in January 2025?

XOVR ETF increased its SpaceX investment by $13 million in January 2025.

What percentage of XOVR ETF's AUM is allocated to SpaceX?

SpaceX represents 11% of XOVR ETF's Assets Under Management (AUM).

What makes XOVR ETF unique in the ETF market?

XOVR ETF is the only exchange-traded fund providing exposure to private equity investments.

How much of XOVR ETF's weight is based on the ER30TR Index?

XOVR ETF utilizes the ER30TR Index for more than 85% of the Fund's weight.

Why did XOVR ETF dispute the Wall Street Journal's SpaceX share price claims?

XOVR ETF disputed WSJ's claims as misguided and lacking understanding of private equity markets, stating the quoted price range was a gross misrepresentation of current market conditions.