SpaceX Rockets to Top Holding in Major ETF

Investment management firm Vanguard recently updated its passively managed equity ETFs, revealing significant changes in holdings. Notably, Space Exploration Technologies (SpaceX) has emerged as the top holding in the Vanguard Extended Market ETF. This fund, which traces its inception to December 2001 and manages $97.7 billion in net assets, now lists SpaceX shares as its primary investment.

As of June 30, the Vanguard Extended Market ETF held 6,775,494 shares of SpaceX, valued at approximately $1.158 billion. While SpaceX has a substantial market capitalization of $1.63 trillion, making it one of the largest U.S. companies, its inclusion as the top holding in an ETF typically comprising small- and mid-cap stocks is unusual.

The key factor driving this placement is SpaceX's limited public float. Only about 5% of its total shares are available for public trading. Consequently, the S&P 500 Completion Index, which the Vanguard Extended Market ETF follows, likely classified SpaceX differently than a typical megacap stock due to this dynamic.

This market characteristic also explains SpaceX's smaller weighting in other Vanguard ETFs, such as the Vanguard Growth ETF. If weighted by market capitalization, SpaceX's share would be comparable to Meta Platforms. However, due to its float-based weighting, its presence in these funds is considerably smaller, representing only 0.29% of the Vanguard Growth ETF.