By Steven Schoenfeld
When I entered the index business more than 30 years ago, the sequence for including an initial public offering in an index was routine and took some time. Companies went public, built liquidity, expanded ownership, and only then entered major market benchmarks.
Things have changed, however. With privately held SpaceX planning to go public at a valuation of $1.8 trillion on Friday, and companies including Anthropic and OpenAI expected to follow quickly, index providers -- who have never faced such scale -- are adjusting the process. FTSE Russell now allows newly listed companies into major U.S. benchmarks after just five trading days. Nasdaq has introduced fast-track rules that could bring megacap IPOs into the Nasdaq 100 within weeks, and S&P Dow Jones Indices is weighing an acceleration of entry criteria for the S&P 500.
Should trillion-dollar companies enter major benchmarks almost as soon as they go public? My answer is no -- at least not automatically. Thematic indexes may have reason to move fast. Broad-market benchmarks that steer trillions of dollars should not.
Indexes resequenced. For decades, the sequencing worked. Companies went public to raise growth capital, investors gained access relatively early, and successful companies matured before becoming major index constituents. Markets had time to establish liquidity, widen ownership, let lockups expire, and improve price discovery.
That world is over. Private capital now lets companies stay private longer and debut as fully formed giants. Excluding a company worth hundreds of billions of dollars from major benchmarks for years may no longer reflect the real economy. But rushing to fix that problem creates another: What are indexes supposed to represent?
Representation and investibility. When trillions of dollars track the same benchmark, a technical rule change is never just technical. It can move billions, influence IPO pricing, and force investors to buy or sell regardless of fundamentals.
The debate comes down to two competing goals: representation and investibility. If SpaceX is one of the world's most consequential companies, broad benchmarks arguably should reflect that. But a huge valuation isn't the same as a large tradable float, and in passive markets that distinction is crucial.
If only a small percentage of shares is available to trade, index-linked funds may crowd into limited float. That can distort pricing, raise implementation costs, and turn index inclusion into a market event of its own. In a case like SpaceX, passive demand could become part of the valuation story before the market has fully digested what the company is worth.
Different indexes provide different solutions. Not all indexes serve the same purpose. Broad market benchmarks such as the S&P 500, Russell 1000, and, to some extent, the Nasdaq 100, are meant to represent large investible segments of the market while supporting an enormous amount of passive assets. Their methodology decisions affect capital allocation globally.
Thematic indexes are different. Investors choosing space exploration, artificial intelligence, or semiconductors are deliberately seeking exposure to a specific slice of the market. Excluding a dominant new entrant can make those benchmarks less useful.
If SpaceX becomes the defining commercial space company, investors in a space-focused index will reasonably expect it to be included as soon as is practical. The same logic applies to Anthropic for AI indexes, as well as other fast-moving industries like robotics and quantum computing.
IPO inclusion should not be a one-size-fits-all policy. Fast-track inclusion may make sense for thematic indexes, where the goal is to capture a theme as soon as it becomes investible. Broad market benchmarks carry a different burden, and should meet a higher standard. When trillions of dollars follow them, methodology is about more than representation, it is also about stability, liquidity, turnover, and investor costs.
Governance matters too. Many companies likely to go public in the next decade will list with dual-class shares, concentrated voting power, and limited shareholder influence. Investors can debate the threshold, but ownership rights, accountability, and transparency are part of what makes a company truly investible.
Modernize with discipline. The SpaceX IPO debate isn't really about one company. It is about whether the indexing industry is prepared for an era in which the largest and most influential businesses arrive later to public markets and demand a central place almost immediately. That reality does call for modernization -- but modernization with discipline.
SpaceX may go where no IPO has gone before. And Anthropic and OpenAI are also likely to break traditional paradigms. The real test is whether index providers will follow with judgment rather than haste. Indexers must balance innovation with integrity and remember that benchmarks don't exist to chase headlines. They exist to serve investors.
Steven Schoenfeld is CEO of MarketVector Indexes, a leading global index provider with more than $150 billion in licensed assets tracking its benchmarks. A 42-year veteran of the investment management and financial services industry, he has held senior roles at Northern Trust, Barclays Global Investors (now BlackRock), IFC/World Bank, and was a floor trader of Nikkei futures at the Singapore Exchange (now SGX). He is co-author of Mastering Crypto Assets , editor of Active Index Investing , and co-founder of IndexUniverse.com (now ETF.com ).
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June 08, 2026 14:29 ET (18:29 GMT)
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