SpaceX has just completed the largest Initial Public Offering (IPO) in history. But like many high-profile listings, its share price is likely to be driven by volatility, stretched valuations, and the outsized influence of its leadership in the early stages.
For investors looking to tap into themes like artificial intelligence (AI), it begs the question – how do you gain exposure without relying on a single, high-profile stock?
This article is for information only and not personal financial advice. Investing can help your money grow, but the value of investments can rise and fall, so you could get back less than you put in. Investing is for the long term, typically 5 years or more.
If you’re not sure what’s right for you, a financial adviser can help.
Investing in investment trusts
Here are two investment trusts that could offer exposure to some of the most cutting-edge tech companies to add to the satellite portion of a core-satellite portfolio.
Remember, investing in these trusts isn’t right for everyone. Investors should invest only if the trust’s objectives align with their own and there’s a specific need for the type of investment being made.
You should understand the specific risks and charges of a trust before investing and make sure that any new investment forms part of a diversified portfolio.
Closed-ended funds can trade at a discount or premium to the net asset value (NAV). Information about this for each trust can be found on their factsheet where the level of discount or premium is shown.
As investment trusts trade like shares, both a buy and sell instruction will be subject to dealing charges within your Hargreaves Lansdown account except online in a Junior ISA. Other charges may apply.
How to invest in SpaceX-style innovation through private markets
One route to access some of today’s technology businesses is through investment trusts with exposure to private markets. RIT Capital Partners is a good example. It has a long track record of investing in private companies and funds, spanning areas like software, fintech and AI.
Importantly, the investment trust structure is well suited to this kind of exposure. It provides patient capital, meaning that managers aren’t forced to sell when investors want their money back.
That makes it far easier to hold a proportion of less liquid, longer-term investments, the kind of private companies that are often driving innovation. Although, being harder to buy and sell does add risk. These kinds of investments make up around 30% of RIT’s net asset value.
In practice, that gives exposure to the same ecosystem of innovation that produces companies like SpaceX – the next generation of global growth businesses that may not yet be publicly listed. With a meaningful allocation to private companies, including names like Anthropic and Databricks, it’s one way to tap into that pipeline earlier as part of a broader investment portfolio.
RIT Capital Partners also invests in emerging markets, high yield bonds, smaller companies, and potentially uses gearing, all of which add risk.
How to access SpaceX-style innovation through public markets
For investors who prefer to stay in listed markets, there are other ways to access the same broad trends. The Polar Capital Technology Trust invests globally in technology companies across areas like semiconductors and digital infrastructure, aiming to capture long-term growth from ongoing innovation.
Ben Rogoff, manager of the Trust, argues that AI is not just another theme but a general-purpose technology capable of reshaping entire industries. The opportunity is not just in the end applications but in the infrastructure behind it. From computing power to data centres, he sees demand still in its early stages and likely to accelerate further.
Another aspect Rogoff notes is that ‘One of the most striking developments is the renewed importance of physical assets. AI systems require vast amounts of energy, data centre capacity and specialised materials. This is driving demand for commodities such as copper, lithium and rare earth elements... Sectors that have historically been underrepresented in equity markets, such as energy, materials and industrials, may play a larger role in the next phase of growth.’
Given the nature of how Rogoff views the sector, the Polar Capital Technology Trust may invest in some higher-risk small and medium-sized companies, as well as companies in more volatile emerging markets. It can also make use of gearing, which adds risk.
An investment trust focused on a specific sector, like technology, should form only a small part of a well-diversified investment portfolio.
Where else can you look for exposure?
It’s worth remembering that many of these themes will eventually feed into mainstream indices.
A broad US or global tracker can still play a central role, providing diversified exposure to the companies that go on to dominate public markets. This helps avoid the need to pick individual winners, while ensuring investors benefit as new leaders emerge.
Related article: What does the SpaceX IPO mean for index investors?
The listed UK market also has an unusually high allocation to commodity and energy stocks with a good representation of industrial exposure.
And our very own Wealth Shortlist is full of expertly selected funds for investors looking to build their own diversified portfolios.