Last week, The Wall Street Journal reported that the Trump administration is likely to issue an executive order that would open the retirement market to private assets.
Shares of the largest private capital firms—such as Blackstone, Apollo, and KKR—jumped following the news, as the move could potentially bring in hundreds of billions of dollars in new assets. Meanwhile, institutional investors like pensions and endowments are scaling back their exposure to private markets.
ETF providers have already been exploring ways to package private assets in ETF wrappers and sell them to retail investors—often at much higher fees than plain vanilla ETFs. In this article, we delve into ETFs that provide private market exposure, with a particular focus on private equity.
A little-known ETF saw its assets surge after adding SpaceX, while a closed-end fund has experienced a wild ride, trading at an extreme premium that highlights intense investor interest in the space company. In contrast, an ETF that added Anthropic and xAI has failed to garner any attention.
The Private Assets Market
Private assets—debt and equity investments in privately held companies—have experienced rapid growth in recent years. Institutional investors and ultra-high-net-worth individuals have increasingly sought them out for their potential to deliver higher returns.
According to BlackRock, private markets could grow from $13 trillion to over $20 trillion by 2030.
Proponents of democratizing access to private assets argue that the number of public companies has declined significantly—from more than 8,000 in the 1990s to about 4,000 today, according to the Center for Research in Security Prices. Many highly valuable companies are choosing to remain private rather than go public.
Critics, however, point to the downsides: higher costs, greater risks, less transparency, and illiquidity. They also argue that private securities may appear less volatile only because their prices aren’t updated in real time like those of publicly traded assets. AQR’s Cliff Asness calls this illusion of low volatility “volatility laundering.”
Investors Want a Slice of the Hottest Private Companies: SpaceX and OpenAI
Elon Musk founded SpaceX in May 2002—before becoming involved with Tesla TSLA. The company now holds a de facto monopoly on rocket launches, offering unmatched frequency and cost efficiency. Its satellite internet division, Starlink, is reportedly a major source of cash flow. According to Bloomberg, its latest funding round valued the company at around $400 billion.
OpenAI, the creator of ChatGPT, is valued at approximately $300 billion. Despite reports of tensions with long-time partner Microsoft MSFT, recent high-profile staff departures, and uncertainty over its conversion into a for-profit entity, OpenAI remains the hottest AI company in the world.
Robinhood’s recent offering of tokenized shares of OpenAI and SpaceX to users in Europe sent its stock soaring. However, OpenAI later condemned the tokens, which do not provide actual equity ownership to everyday consumers.
Private Equity in an ETF Wrapper
Private assets are generally illiquid and hard to value, making them traditionally unsuitable for ETFs, which offer daily liquidity and pricing.
The SEC limits open-ended funds to holding no more than 15% in illiquid investments. An investment is classified as illiquid if it can’t be sold within seven days without significantly affecting its market price.
The SPDR SSGA IG Public & Private Credit ETF PRIV takes a novel approach, targeting up to 35% exposure to private credit. Apollo acts as a liquidity provider by selling private credit instruments to the fund and committing to repurchase them at State Street’s request.
Other ETF providers have developed innovative strategies to gain private market exposure. Broadly, these ETFs fall into three categories:
ETFs that own private companies through special purpose vehicles (SPVs) or directly
ETFs that invest in publicly traded private equity firms
ETFs that target public companies with private equity–like characteristics
XOVR: Exposure to SpaceX, But at What Price?
The ERShares Private-Public Crossover ETF XOVR is the first ETF to hold a private company. It added SpaceX on December 3 via a special purpose vehicle (SPV). The Wall Street Journal noted that such SPVs may charge fees as high as 25% of gains, but it remains unclear how those fees impact the valuation of XOVR’s SpaceX holdings.
Additionally, there’s little transparency regarding how the ETF determines “fair value” for its SpaceX position, as required by the SEC.
On December 10, the fund marked up its SpaceX holding from $135 to $185 per share, claiming a 37% gain in one week. The valuation has not changed since, despite Elon Musk’s public feud with Donald Trump and Trump’s threat to “terminate” federal contracts with Musk’s companies.
The fund has about $460 million in assets, with $334 million flowing in after the SpaceX addition. The ETF has returned roughly 7.2% year-to-date, slightly trailing the SPDR S&P 500 ETF’s SPY 8%. Meanwhile, the Invesco QQQ QQQ is up almost 11% during the same period. NVIDIA NVDA is XOVR’s top holding at around 10%, while SpaceX makes up 7.2%.
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AGIX: Direct Exposure to xAI and Anthropic — and It Beats QQQ
The KraneShares Artificial Intelligence & Technology ETF AGIX offers rare direct exposure to Musk’s xAI and Amazon-backed Anthropic—unlike XOVR, which invests via an SPV. AGIX holds equity stakes in both companies as a shareholder on their cap tables.
AGIX added Anthropic on March 5 and xAI on July 18, 2025. These holdings currently account for 3.6% and 4.5% of the portfolio, respectively. KraneShares states that the fund’s private holdings are valued daily by its Fair Value Committee using all available information.
Despite significantly outperforming QQQ since its inception in July 2024, the fund has attracted limited investor interest. AGIX is up approximately 31.5% since launch, compared to an 18.3% gain for the Nasdaq-100 and 15.2% for the S&P 500.
The fund currently has $33.7 million in assets, with less than $8 million flowing in since the Anthropic addition. Meta META and Microsoft are its top holdings.
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DXYZ: A Closed-End Fund for SpaceX with a Wild Ride
The Destiny Tech 100 DXYZ, often mistaken for an ETF, is a closed-end fund that aims to invest in the top 100 venture-backed private tech companies. It currently holds 22 companies, with SpaceX making up 52% of the portfolio.
Since its March 2024 debut, DXYZ has surged over 250%, but its performance has been extremely volatile. It frequently trades at a massive premium to its net asset value (NAV).
After an early spike of over 1,000%—driven by speculators seeking exposure to hot unicorns—the fund plummeted, giving back most of its gains. It is down nearly 45% year-to-date and remains well below its all-time high.
As of March 31, 2025, DXYZ reported an NAV of $6.31 per share, yet it trades at over $33. The fund updates the fair value of its holdings on a quarterly basis, so while the latest NAV is unknown, the premium could still be close to 500%.
Investors should remember that a closed-end fund’s price can deviate significantly from its NAV based on market demand—unlike ETFs and mutual funds.
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ETFs That Hold Private Equity Companies
The Invesco Global Listed Private Equity ETF PSP and ProShares Global Listed Private Equity ETF PEX have been around for years. PSP manages about $323 million in assets, while PEX has around $15 million. Their expense ratios are relatively high at 1.79% and 2.99%, respectively.
Both funds have significantly underperformed the S&P 500 and the Vanguard Total World Stock ETF VT since their inception. PSP is up 128% over the past ten years, and PEX has risen 93%, whereas the S&P 500 index is up more than 261%, and VT has gained 164%.
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A newer option is the VanEck Alternative Asset Manager ETF GPZ, which offers exposure to private equity, venture capital, direct lending, infrastructure, and real estate firms such as Blackstone, Brookfield, and KKR.
ETFs That Mimic Private Equity–Like Returns
The Pacer PE/VC ETF PEVC invests in publicly traded companies that exhibit risk and return profiles similar to private equity and venture capital–backed firms. Alphabet GOOG, Microsoft, and Meta Platforms are its top holdings.
The KraneShares Man Buyout Beta Index ETF BUYO targets small- and mid-cap U.S. stocks that resemble companies typically held by buyout and PE funds.
BlackRock’s Push into Private Markets
BlackRock, the world’s largest asset manager, is making a major push into private markets. It has invested nearly $28 billion to acquire private equity firm Global Infrastructure Partners, private-assets data provider Preqin, and private credit manager HPS Investment Partners.
Earlier this month, BlackRock also announced plans to acquire ElmTree Funds, a real estate–focused private equity firm.
The asset manager recently revealed it will launch a 401(k) target date fund next year with a 5% to 20% allocation to private investments. CEO Larry Fink has frequently emphasized the importance of expanding retail access to private markets—potentially through ETFs.
Bottom Line
Private assets have become Wall Street’s latest buzzword, and ETF providers are racing to package them within the ETF wrapper. But as these products hit the market, investors will need to carefully evaluate whether the offerings live up to the hype.
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This article originally published on Zacks Investment Research (zacks.com).
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