Space is so nice, they’re going twice.

SpaceX is scheduled to go public on the Nasdaq tomorrow in the largest initial public offering ever, targeting a valuation of $1.8 trillion. Already a handful of asset managers who deal in leveraged products have filed for 2x funds tracking the stock. Plus, the issuers are trying to launch the same day as SpaceX’s IPO. It’s a signal of how quickly and aggressively issuers will move when a high-profile name hits public markets, a trend that might ramp up as companies like Anthropic and OpenAI work to go public this year as well.

“When you’re a 2x issuer, you throw a lot against the wall, and you’re not sure if it’s going to be popular,” said Matt Tuttle, CEO of Tuttle Capital Management, one of the firms launching a leveraged product. “But there are certain names you know are going to be hot, and SpaceX is one of them.”

If You Ain’t First, You’re Last

Other issuers expected to launch leveraged SpaceX funds the day of the IPO include Defiance, Direxion, ProShares, Leverage Shares and GraniteShares, according to the firms’ websites. “These proposed funds are a step into the unknown,” said Zach Evens, Morningstar analyst, adding that they’re “not for the faint of heart” and should be used as trading tools only, if at all.

Can the funds actually hit markets the same day SpaceX does? It’s going to be difficult for a few reasons:

• A 2x ETF relies on calls and puts to rebalance and create leverage throughout the day, but options rarely exist on a stock’s launch day.
• There’s also the issue of price history: There isn’t any. With significant demand for shares, prices may be distorted for a time before the market balances out and trading volume subsides, Evens said.

“Nobody has ever launched a 2x fund on an IPO’s launch day,” Tuttle told Advisor Upside. “But just because it’s never been done before doesn’t mean it’s not doable.” However, he also admitted his fund and the rest could end up launching first thing Monday morning instead of Friday.

What’s the Difference? With so many issuers launching essentially the same product all at once, who’s going to be the winner? Your guess is as good as his, Tuttle said. “Unfortunately, you can’t really differentiate yourself,” he explained, adding that bigger asset managers will have more to spend on digital marketing, but that might not be much of a needle-mover. “We don’t know where the chips are going to fall.”

What is war good for? Apparently, the markets.

Despite current conflicts in Ukraine and Iran, as well as in Iraq and Afghanistan in the earlier part of the century, the major stock market indexes have been able to price in potential shocks and still climb to record highs. Their performance has been quite remarkable, says Robert Kaplan, a prominent geopolitical analyst, bestselling author and senior fellow at the Foreign Policy Research Institute. “Markets handle geopolitics very well,” he said at the EDGE conference in Boca Raton, Florida, on Tuesday. “You don’t notice that much of a change when you look at your retirement emails once a month.”

While individual sectors, particularly energy, have reacted sharply in recent months, advisors who stayed the course have largely been rewarded with a historic bull run. “Everyone talks about how investment advisors have to factor in geopolitics, but I haven’t seen it,” he said. “The markets have been incredibly resilient.”

War, What Is It Good For?

There’s one major caveat, however. A war in Taiwan, which China’s government views as a breakway territory, could be more than just a stock market correction, becoming an “extinction level” financial event that Kaplan said might take a decade to recover from. It could force a market correction of 40% to 50%, he said, and one the Federal Reserve would be powerless to stop. “It would be like World War I,” he said.

The problem is, unlike conflicts in Ukraine or the Middle East, a war involving Taiwan would directly threaten global supply chains. Taiwan produces many of the world’s most advanced semiconductors, while the surrounding waterways are among the most important chokepoints for commercial shipping lanes on the planet. Almost half of all the world’s oil flows from the Middle East through the South China Sea, Kaplan said.

For advisors, the lesson isn’t about predicting geopolitical events, but understanding which ones actually matter.

Exchange-traded funds that have the highest exposure to Taiwan include:

• The Franklin FTSE Taiwan ETF (FLTW), which is 98% weighted in the country and has gained 63% this year.
• The iShares MSCI Taiwan ETF (EWT), which also has around 98% of its holdings in Taiwan-based companies, and has risen 57% over the same period, according to etfdb.com.

Change Happens. The good news is that geopolitical currents can change direction quickly. The war in Iran, for instance, could force a regime change in just a few years, potentially unleashing some 85 million “highly educated, high tech” Iranians into the global workforce. The country might transform almost overnight, Kaplan said. “You may be grappling with the idea of investing in Iran, as crazy as that sounds.”

What can you learn from analyzing 1 million client meetings? Quite a lot, it turns out.

The AI company Jump recently tapped researchers at the American College of Financial Services to assess how well advisors are easing clients’ fears about retirement and how frequently their financial planning recommendations are actually accepted. The results, based on more than a million real client conversations collected by Jump’s meeting-prep and notetaking tools, were eye-opening, according to Liam Hanlon, vice president of strategy and head of insights. They show advisors are making a real difference for clients when it comes to instilling confidence about retirement and long-term investing. Advisors can struggle with recommendation acceptance, however, and they need to be cautious about how they frame options like buying annuities or delaying Social Security.

“It’s exciting to be at a point where we can use AI to measure these effects,” Hanlon told Advisor Upside.

Digging Into the Data

To complement the conversational data, the researchers asked a large group of advisors who they believed spent more time speaking in meetings: themselves or their clients. The vast majority (87%) said clients spent more time talking in a typical meeting, but the real-world data showed the opposite. Advisors spoke the majority of the time in 84% of meetings analyzed. That’s not necessarily a bad thing, Hanlon noted, as clients work with advisors specifically to access their expertise and get guidance on complex topics, and the approach seems to be working:

• Average client sentiment at the start of monthly meetings registered as 6.41 out of 10 over the one-year study period.
• Average meeting-end sentiment rose to 7.47.

Unless prompted, clients ask relatively few retirement questions overall, preferring to discuss current news events and near-term developments in their personal lives. When advisors push them to talk about retirement, questions cluster into a set of common topics. These include account management and consolidation, tax management, withdrawal strategies, asset allocation and Social Security decisions. When fears are discussed, topics usually are running out of money, suffering market losses and meeting high healthcare costs.

The data shows most advisors are doing a good job coaching clients through these issues. Specifically, just 15% of clients felt positive at the start of a given retirement conversation, but it jumped to 87% by the end.

Room for Improvement? Such numbers show advisors are effective at managing client sentiment on retirement, Hanlon noted, but there is room for improvement when it comes to recommendation acceptance, especially for annuity purchases. The common technique of social framing, which involves telling people that others in their situation generally make a given choice, reduces annuity acceptance by 18%. Default bias framing, which involves telling people a given choice is the logically expected behavior, boosts acceptance by 27%. The bottom line: How advisors talk about retirement topics matters as much as starting those conversations in the first place.