ERShares has provided additional context regarding the framework supporting private-company exposure in the ERShares Private-Public Crossover ETF (XOVR).
The firm writes that XOVR was structured as the first ETF designed to provide private-company exposure through an underlying special purpose vehicle (“SPV”) framework reflected in daily NAV alongside public equities, within a regulated ETF structure.
“As the pioneer of this ETF structure, ERShares has refined the framework over time to improve efficiency, durability, and investor clarity. Through ongoing work with experienced service providers and advisors, ERShares has strengthened and streamlined the framework to enhance operational efficiency and investor clarity.
“Given the complexity of private-exposure structures, ERShares is issuing this clarification to address common misinterpretations and ensure the fee treatment is understood as described in the Fund’s disclosures. ERShares encourages readers to review primary source disclosures and to consider independence and disclosure standards that apply to third-party commentary on complex product structures.”
The firm writes that the fund’s private sleeve includes exposure to SpaceX, reflecting the strategy’s focus on scaled innovators that are often difficult to access through traditional investment channels.
“Portfolio exposures, including private holdings, are continuously monitored within the Fund’s liquidity, valuation, and risk oversight framework as allocation levels evolve. This update provides additional context on the Fund’s crossover framework, including structural refinements, portfolio mechanics, private exposure, liquidity oversight, valuation alignment, and disclosed expense treatment. Allocation levels may adjust over time as part of normal ETF portfolio mechanics and are monitored within the Fund’s risk framework.
“XOVR’s private-company sleeve includes exposure to select private companies, including SpaceX, through its underlying vehicle structure, alongside a highly liquid public equity portfolio based on the Entrepreneur 30 Total Return Index. Private exposure can be scarce, and access is often limited across traditional investment channels. For investors seeking participation in scaled innovators such as SpaceX, crossover portfolios may at times reflect higher relative exposure as portfolio percentages adjust through normal ETF mechanics. ERShares seeks quality sourcing and disciplined execution, aiming for competitive entry terms when available and economic alignment intended to place fund investors alongside experienced investors in the underlying exposure (e.g., on a pari passu basis where applicable), consistent with ERShares’ objective of expanding investor access to private-market opportunities within a regulated ETF framework.”
Fee treatment clarification (SPV-related):
Acquisition expenses already incurred: The SPV has already incurred the acquisition-related expenses associated with obtaining the position.
Fund-level fee layering: The Fund does not introduce a separate acquisition or performance fee layer beyond underlying vehicle expenses as described in disclosures.
Ongoing costs: Expenses are generally limited to ordinary SPV operating costs (including audit and other incidental fees, as applicable) and ordinary ETF-related fees.
Expense layering clarification: Underlying vehicle costs are reflected in the SPV’s valuation and disclosures, rather than charged as a separate Fund-level performance fee layer.
Why this matters: the firm writes that clear communication around fee structure and portfolio mechanics is essential to understanding crossover implementation. XOVR’s framework is designed to reduce duplicative fee layering while providing access to innovation private companies within a liquid ETF structure.
Allocation levels may evolve over time, and the refined framework is intended to deliver that access with improved transparency, alignment, and consistency with prevailing market pricing. The Fund’s creation and redemption process continues to operate as designed, supported by its highly liquid public equity sleeve.
“XOVR was built to expand how investors access innovation by integrating selective private exposure within a liquid ETF structure,” says Joel Shulman, Founder and CIO of ERShares. “Our focus has been on refining the framework to enhance transparency, align economic exposure, and provide disciplined access to companies, including leading innovators such as SpaceX, that historically remained outside traditional public portfolios.”
“Innovation increasingly spans both private and public markets, and investors need tools that reflect that reality,” says Eva Ados, Chief Investment Strategist at ERShares. “Crossover portfolios that include companies such as SpaceX are designed to help investors participate more fully in the innovation lifecycle while maintaining liquidity, transparency, and disciplined portfolio construction.”
