Thirty-seven trading days. That’s all it took for the Tema ETFs' Space Innovators ETF, trading under the ticker NASA, to balloon past $1 billion in assets. By the end of the past week, it rocketed to over $2.6 billion, according to CNBC Business. Retail investors, eager to hitch a ride on SpaceX’s impending IPO, are leading this charge.

SpaceX is setting an unusual pre-IPO stage, granting retail investors access typically reserved for institutional giants. Enter the NASA fund, a rare avenue for retail investors to secure a piece of Elon Musk’s space odyssey before it becomes public. CNBC Business noted that SpaceX shares represent about 7.5% of the NASA ETF, making it one of the few investment vehicles to hold these privately traded shares.

"When we're talking about space investment, including SpaceX is essential," Maurits Pot, CEO of Tema ETFs, stated on CNBC's "ETF Edge." The fund’s strategy isn’t to offload shares post-IPO. Instead, it's about recalibrating the position to market price. Different game, same ambition.

NASA isn’t alone. Ron Baron’s First Principles fund, known by its ticker RONB, also holds a stake in SpaceX. And then there's the ERShares Private-Public Crossover ETF (XOVR), which values its SpaceX shares at nearly $300 million, anticipating an IPO north of $1.5 trillion. A contested valuation, as CNBC Business reported.

ETF Action’s Mike Akins highlighted on "ETF Edge" how ETFs democratize such access, transforming what was once a complex hunt for individual stocks into a simple ticker search. "Now there's a ticker," he noted. The evolving landscape is evident with a slew of new space-themed ETFs like Van Eck’s WARP and Global X’s ORBX, signaling an expectation for space to echo past thematic trades in tech innovation.

But Todd Sohn from Strategas warns that not all space ETFs are built alike. The purity of holdings varies. “Due diligence is crucial,” he stresses. The market's appetite for space-themed ETFs is palpable—six launched recently. Yet caution prevails as their focus ranges from pure-play space exploration to broader aerospace and defense, according to CNBC Business.

The Procure Space ETF (UFO) and SPDR S&P Kensho Final Frontiers ETF (ROKT) have carved niches with their diverse holdings, from Rocket Lab to Deere. Notably, the NASA ETF takes an active management approach, stirring up higher cost concerns compared to its passive counterparts.

For retail investors, volatility is the risk shadowing these nascent space ventures. The explosion of Blue Origin’s New Glenn rocket served as a fresh reminder. “Expect volatility,” Sohn cautioned, adding that some companies will soar while others may crash. The stakes are as high as the stars.

The rapid surge of the NASA ETF can be attributed to a confluence of factors, chief among them the innovative approach SpaceX has taken in its pre-IPO phase. Unlike many companies that restrict pre-IPO access to institutional investors, SpaceX has opened the door for retail investors, a move that is both unprecedented and appealing to those looking to tap into the burgeoning space industry. This democratization of access is facilitated by brokerage firms that are enabling retail investors to partake in what was traditionally an exclusive domain.

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Maurits Pot, the visionary behind Tema ETFs, emphasizes that including SpaceX in the NASA ETF was a strategic decision to ensure that the fund provides comprehensive exposure to the space sector. By holding privately traded shares of SpaceX, the NASA ETF offers a unique opportunity for investors to gain indirect access to Musk's ambitious space endeavors even before the company goes public.

While the NASA ETF has attracted significant attention, it's worth noting the presence of other ETFs that also include SpaceX in their portfolios. Ron Baron, a seasoned investor with a long-standing interest in Tesla and SpaceX, incorporates the rocket company into his First Principles fund (RONB). Although SpaceX constitutes a smaller portion of the RONB ETF compared to Tesla, its inclusion highlights the strategic importance of the space sector in Baron's investment philosophy.

The ERShares Private-Public Crossover ETF (XOVR) further exemplifies the growing interest in space-related investments. By holding SpaceX shares valued at nearly $300 million, XOVR positions itself as a key player in the anticipation of a SpaceX IPO, which some analysts speculate could surpass $1.5 trillion in valuation. This potential valuation underscores the significant financial implications of SpaceX's transition from a private to a public entity.

The broader ETF landscape is witnessing a transformation with the introduction of new space-themed funds such as Van Eck’s WARP and Global X’s ORBX. These funds are poised to capitalize on the increasing interest in space technology and exploration, drawing parallels to previous thematic trades in areas like artificial intelligence and quantum computing. This trend signifies a growing consensus that space could indeed become the next frontier of investment innovation.

However, as Todd Sohn cautions, not all space-themed ETFs are created equal. The level of exposure to pure-play space companies versus broader aerospace and defense stocks varies significantly across different funds. This disparity necessitates thorough due diligence by investors to ensure alignment with their investment goals and risk tolerance.

The Procure Space ETF (UFO) and the SPDR S&P Kensho Final Frontiers ETF (ROKT) are examples of funds that have established themselves with diverse portfolios encompassing both emerging space companies and established aerospace firms. These ETFs offer investors a way to diversify their exposure within the space sector, balancing the high-risk, high-reward nature of space exploration with the stability of more traditional aerospace investments.

The active management approach of the NASA ETF sets it apart from its passive counterparts. By actively selecting stocks, the fund aims to optimize its holdings in response to market dynamics and emerging opportunities within the space sector. However, this approach also comes with higher management fees, which investors must weigh against the potential benefits of active management.

Volatility remains a central theme in the discourse surrounding space investments. The recent explosion of Blue Origin's New Glenn rocket serves as a stark reminder of the inherent risks associated with space exploration. As Sohn points out, the nascent stage of the space industry means that volatility is to be expected, with some companies poised for success while others may falter due to unsustainable business models.