XOVR is A $1.5 Billion ETF That Holds SpaceX Pre-IPO, But The Returns Are Awful

ERShares Private-Public Crossover ETF (NASDAQ:XOVR) attempts to solve a problem that has frustrated growth-focused investors for years: how to access high-conviction private companies before they go public while holding a diversified portfolio of public growth stocks. With $1.5 billion in assets and a 0.75% expense ratio, XOVR offers retail investors exposure to pre-IPO firms like SpaceX, Anduril, and Klarna alongside public tech leaders. The question is whether this hybrid approach delivers or simply adds complexity without commensurate returns.

The ETF’s Intended Portfolio Role

XOVR targets investors who want exposure to disruptive innovation but feel they are arriving late to public markets. The fund allocates roughly 10-11% to private equity through special purpose vehicles (SPVs), with SpaceX representing the largest private holding at 10.05%. The remaining portfolio concentrates in technology (31.5%), healthcare (14.7%), and communication services (14.4%).

The return engine relies on two mechanisms: capital appreciation from high-conviction public growth stocks like NVIDIA (NASDAQ:NVDA | NVDA Price Prediction), Meta (NASDAQ:META), and Palantir (NASDAQ:PLTR), and early-stage value capture from private companies before they list. The public equity sleeve provides liquidity and market-linked returns, while the SPV allocation theoretically allows investors to participate in value creation before public market pricing — though SPVs introduce valuation lag and liquidity constraints that complicate performance assessment.

Does It Deliver?

The performance record is challenging. XOVR has declined 14.3% year-to-date and is down 11.31% over the past year, a stark contrast to the S&P 500’s 12% gain over the same period. The gap reflects the fund’s heavy tilt toward speculative growth names that have struggled in a higher-rate environment.

Over five years, XOVR is down 34% — a period during which the S&P 500 gained 74.77%. The underperformance reflects the fund’s structural challenges: SPV valuations lag real-time markets, speculative growth names have struggled in a higher-rate environment, and the private market access premium has not materialized into returns. The Nasdaq-100’s 80.86% gain over the same period underscores that even volatile tech-heavy strategies outpaced XOVR’s hybrid approach.

Thematic peers also outperform. The Renaissance IPO ETF (NYSEARCA:IPO) is down 6.6% over one year, still negative but ahead of XOVR. The ARK Innovation ETF has gained 4.89% over one year despite its own volatility.

The Tradeoffs

Concentration risk is substantial. The top holding alone exceeds 10% of assets, and small changes in SpaceX exposure have triggered trading volume spikes of 20x average daily volume, signaling speculative retail interest over stable institutional demand.

Private equity valuations add another layer of uncertainty. SPV pricing lags real-time market conditions, making it difficult to assess whether private holdings are fairly valued ahead of eventual public debuts. Combined with no dividend yield and consistent negative returns across multiple time horizons, the private market access premium is hard to justify.