Why one fund manager is 'nervous' about SpaceX list, but you'll probably get a slice anyway

Elon Musk is expected to list SpaceX on the stock market this week.

Photo: Gonzalo Fuentes/Reuters via CNN Newsource

Elon Musk's SpaceX is expected to list on the stock market this week, targeting a valuation of more than US$1.75 trillion.

The move has generated plenty of headlines and forecasts that other big tech names that have, until now, been private - such as Anthropic and OpenAI - are likely to quickly follow suit.

What does it mean for New Zealand investors?

Commentators say the main way most people will get a slice of the company is through KiwiSaver investment in funds that track indexes.

Kernel founder Dean Anderson said the concern many investors had was that "mega-IPOs" would join a market that was already concentrated. The top 10 companies in the S&P500 had grown to make up close to 40 percent of the index by weight, as of March 2026.

He said some index providers had confirmed they would "fast track" companies like SpaceX into the index and not require them to trade for a year, before they were included, as the S&P does.

"If somebody is exposed or got a KiwiSaver that has index tracking, then they're going to end up at some point in the future likely to have an allocation towards SpaceX or Anthropic," Anderson said. "What people also forget though is that they've probably already got an exposure, given the sort of co-investment that's gone on from Google and Microsoft and others into OpenAI and into Anthropic already.

"Interestingly, actually, most investors today probably already indirectly have exposure to these IPOs.

"What we have noticed from an index-investing perspective and obviously S&P 500 is one of the most popular index funds in the market. In fact, [Vanguard S&P 500 ETF] has just become the first trillion dollar fund.

"People are going, 'What does this mean for the fund?' and actually what surprised me is... most of the inquiries we've had have been people cautious and kind of not in favour of inclusion."

He said, while SpaceX could have a very large market cap, which would put it near the top of the index, indexes were adjusted for free float or how many shares were publicly available.

"With something like SpaceX, I think it's something around 5 percent will be free float. In reality, when it comes into the index, it's still actually going to be a relatively low percentage.

"That may give investors some comfort, if they are concerned about this coming in - and I think the concern is by how big it is and what impact it could have - that the impact may be less than they are thinking."

Gertjan Verdickt, a senior lecturer in finance at the University of Auckland, said SpaceX entering the indices would mean other stocks must be sold by exchange-traded funds that tracked those indexes and shares in SpaceX bought instead.

That could reduce the price of other companies and increase the SpaceX share price.

"Overall, there will be a slight negative effect on liquidity, but this will be marginal, given the size of these companies, and generally, price discovery is a bit weakened for those leaving," Verdickt said. "On the flipside, stocks that leave an index see lower volatility relative to those that are in the index.

"This is good news for investors."

Koura founder Rupert Carlyon agreed KiwiSaver funds would likely end up with SpaceX exposure.

"I think it's going to be a really interesting IPO, this one," he said. "They've made it very clear that they're going hard at retail.

"The traditional story of an IPO is you put it out into the market, the institutions get large allocations, and then retail come in and get their hands on things just after the IPO. That generally kind of pushes the price up a little bit in the post-IPO market.

"Here, because it's so large, because it's the Elon Musk story, it is very retail focused, so that's why I'm kind of curious as to what happens in the aftermarket, if it's all retail desperately trying to get their hands on."

He said SpaceX employees might want to sell their shares.

"I'm nervous. I'm also slightly skeptical on the Elon Musk story.

"I do think that you're going to find that a lot of the institutions take the same view as me and they're going to be sitting there going, 'Let's just give it a little bit of time to see where it all lands and how it all kind of plays out before we jump'."

Carlyon said there was a lot of hype around the listing.

"The best description I can think is he's selling it as an AI business that does rockets too and we know the only thing that it does is rockets, whereas the AI business is still tiny compared to the others."

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