Surging SpaceX Stake Raises Doubts Over Private Assets in ETFs

A driver passes in SpaceX offices in Hawthorne, California.

Photographer: Frederic J. Brown/AFP/Getty Images

A modest investment in SpaceX that thrust a niche fund into the limelight in recent months has morphed into a monster position, testing the very capacity of exchange-traded funds to hold unlisted assets.

Around 37% of the ERShares Private-Public Crossover ETF is now invested in Elon Musk’s rocket ship maker, a figure that has climbed well above 40% in recent days, according to data compiled by Bloomberg.