This fund has jumped 1,200% on Anthropic and SpaceX hype. Retail investors should be cautious.

By Christine Ji

Shares of the Fundrise Innovation Fund have surged as investors look to invest in private AI companies, but history suggests that these high valuations aren't tenable

Shares of the Fundrise Innovation Fund traded as high as $575 this week.

A fund with exposure to hot private companies such as Anthropic, OpenAI and SpaceX has become one of the most explosive investments, just a week after its public debut on the New York Stock Exchange.

Shares of the Fundrise Innovation Fund (VCX) have surged over 1,200% since becoming public on March 19, jumping to a record $575 in Wednesday's intraday action before finishing the day at $380. Trading has been paused multiple times in the past week due to the volatility of the shares.

The mania reflects how investors are eager to get a piece of hot AI companies gearing up for potential public offerings in 2026. SpaceX could file initial-public-offering paperwork either this week or next as it aims to raise over $75 billion, according to a recent report from The Information, and that's further fueling investor excitement.

See more: You can invest in SpaceX before its IPO - but should you?

The fund was founded in 2022 with the mission of democratizing access to top private tech companies, Benjamin Miller, the CEO of Fundrise, told MarketWatch. Prior to its public launch, VCX had over 100,000 existing investors and over $650 million in initial assets under management.

As companies stay private for longer, retail investors are looking for ways to get in on in high-growth AI companies. "Institutional investors have been here for a couple years already," said Noel Moldvai, the CEO of pre-IPO investment platform Augment. "What's changing is that demand from individuals is growing fast."

Read: SpaceX could soon file for an IPO. Why EchoStar and other space stocks are rising.

But investors should be aware that investing in pre-IPO instruments can be a speculative move, with heightened volatility and limited liquidity.

Shares of the fund are trading over 20 times their net asset value (NAV) of $18.26, based on FactSet data. That means investors are effectively paying $20 for every $1 of actual assets.

VCX is a closed-end fund, meaning that it issues a fixed number of shares that can be bought and sold on brokerages throughout the day. The NAV represents the fair value of the underlying assets, calculated by subtracting the fund's liabilities from its total assets and dividing the remainder by the number of outstanding shares. Typically, closed-end funds trade at a discount to NAV due to management fees and the illiquidity of the underlying assets.

According to the fund's prospectus, shares purchased prior to Feb. 20 are subject to a six-month lockup period, which limits the liquidity of the fund.

See more: You can now invest in private tech stocks like Ramp and Stripe through Robinhood - but here's what you need to know

While Anthropic, OpenAI and other AI companies have grown their private-market valuations substantially in recent months, this isn't the first time that closed-end funds offering access to flashy private companies have trended.

In April 2024, shares of the Destiny Tech100 fund DXYZ - which includes holdings such as SpaceX, OpenAI and xAI - soared as much as 1,008% upon its listing on the New York Stock Exchange, but they gave up the gains shortly after. Shares have fluctuated wildly in the two years since, rebounding 600% in late 2024 and then declining over 50% from that peak.

Some of VCX's recent success seems to have rubbed off on DXYZ as well, as shares of the fund rose 15% on Wednesday. Today, DXYZ trades at $30.58, around 50% higher than its NAV.

DXYZ may have underperformed in the past because it traded at too high of a premium to its NAV, according to Nik Talreja, CEO of the venture-investment platform Sydecar. Additionally, companies like Anthropic and OpenAI didn't have the household recognition they do now.

"The timing is better for VCX, and it is much more concentrated in Anthropic and OpenAI (20.7% and 9.9%, respectively), which appeals to today's retail investors," Talreja said. Still, that doesn't mean VCX's current valuation is sustainable.

Read on: Forget meme stocks and bitcoin. This fund investing in SpaceX and OpenAI may be the latest Wall Street mania.

-Christine Ji

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

03-25-26 1811ET