Key Points
- Passively managed ETFs are significant holders of the limited number of SpaceX shares currently available on the Nasdaq.
- ETFs will buy more SpaceX as the float increases.
- There are plenty of ETFs that won't buy SpaceX, even once it joins the S&P 500.
- 10 stocks we like better than Space Exploration Technologies ›
Investment management firm Vanguard recently updated the holdings of many of its index funds and exchange-traded funds (ETFs).
The second-largest ETF by net assets, the Vanguard Total Stock Market ETF( VTI +0.03%), holds 18,738,438 shares of Space Exploration Technologies( SPCX-2.85%) -- worth $3.2 billion as of June 30. That's 3.4% of the 555 million shares that SpaceX sold for $135 from its initial public offering (IPO). Granted, SpaceX also raised another $10.7 billion from underwriters that exercised options to buy shares. But the key takeaway is the speed and size at which the ETF gobbled up SpaceX stock.
Here's what investors need to know about SpaceX's impact on well-known low-cost ETFs, and ways they can position their portfolio to get exposure to SpaceX or avoid it entirely.
Image source: Getty Images.
ETFs are buying SpaceX stock at a rapid rate
The Vanguard Total Stock Market ETF was aggressively buying a good chunk of SpaceX's float in June at a price far higher than the price at the time of this writing of $118.24 per share. In contrast, Vanguard's largest ETF by net assets, the Vanguard S&P 500 ETF, won't begin buying SpaceX until it is added to the S&P 500, which will be June 2027 at the earliest.
Other Vanguard ETFs have a higher percentage weighting in SpaceX than the Vanguard Total Stock Market ETF. SpaceX already makes up 2.4% of the Vanguard Communication Services ETF( VOX +0.56%) -- a sector ETF that invests in communication services stocks like Alphabet, Meta Platforms, and Netflix.
Because the sector ETF is more focused, it will hold a larger position in SpaceX than a broad-based fund like the Vanguard Total Stock Market ETF, which aims to own the entire U.S. stock market. Similarly, growth-focused ETFs like the Vanguard Growth ETF and Vanguard Mega Cap Growth ETF will own more SpaceX than the Vanguard Total Stock Market ETF.
Aligning ETF holdings with your interest in IPOs
The Vanguard Total Stock Market ETF bought a sizable stake in SpaceX less than three weeks after its IPO -- showcasing the impact of ETFs on demand for newly public companies. And it stands to reason that these ETFs will buy even more SpaceX as more shares become available for trading on the Nasdaq.
That timeline depends on the SpaceX lockup period and whether holders of SpaceX restricted stock units and early release eligible shares decide to sell. The first stress test will come on Aug. 6 -- two days after SpaceX reports second-quarter 2026 earnings. On that date, 20% of early-release eligible shares will be transferable.
Investors who don't want to be in rules-based ETFs that will be buying shares of SpaceX as more hit the Nasdaq should consider ETFs whose criteria don't align with SpaceX in the first place, such as the Vanguard Value ETF, the Vanguard Dividend Appreciation ETF, or any non-communications sector ETF. Investors who like the idea of being in an ETF that will be backing up the truck on SpaceX, on the other hand, may want to take a closer look at the Vanguard Communication Services ETF.
