The big financial news has been the successful IPO of SpaceX. It has made Elon Musk a trillionaire on paper at least with the firm itself worth over $2 trillion, again on paper.
The big issue for advisers is that several leading indices will start to feature the stock. The two likely of most relevance for the UK are the MSCI and FTSE Russell.
That may see SpaceX included in the next few weeks and months with the weighting expected to increase in the next six months as more shares are released. These speedier listings may also mean that other AI names notably Anthropic and OpenAI may also feature faster, which may eventually build up to significant exposure.
There hasn’t been a huge amount of coverage of the issue outside of the FT but this letter from Professor Iain Clacher, Ashok Gupta and Dan Hedley of
New Capital Consensus is rather blunt though they mainly focus on workplace DC pensions.
To quote: “A UK DC saver mechanically tracking MSCI World now has less exposure to the entire UK market (3.7 per cent) than to Nvidia alone (5.6 per cent). Under plausible scenarios to 2036, the UK weight falls below 3 per cent and an “AI bloc” — SpaceX, OpenAI, Anthropic and the existing Magnificent Seven — exceeds 40 per cent of the global benchmark. The historical analogue for that degree of single-bloc dominance is Japan in 1989. UK pensioners were not asked then either.”
I did cover the implications extensively on Octo Members.
Citywire Funds Insider suggests that the moves to embrace SpaceX by some index providers is giving passives an identity crisis.
SpaceX is a ‘meme stock’ that should face ESG hurdles, says ABN Amro again Citywire reports.
The Association of Mortgage Intermediaries has refreshed its brand focusing on Advice, Mortgages and Insurance as Mortgage Strategy reports.
Brokers are divided on how this will apply with the Association also retaining its name. A bit confusing and the comments are not entirely kind.
The strapline is simple and actually rather effective - 'Championing Advice, Shaping the Future’.
The FCA is seeking an injunction against Neil Woodford’s UAE domiciled W4.0.
The FCA suggests that website and strategies constitute regulated activities. Something to watch closely.
