What the SpaceX IPO Means for Investors
With SpaceX targeting a June 12 IPO at a valuation far exceeding USD 1 trillion, and Anthropic and OpenAI on the verge of historically large IPOs of their own, we revisit the question: What happens when companies of this scale enter equity indexes?
Rather than speculate, we simulated SpaceX’s inclusion in the MSCI USA Index1 from early 2023 under different free-float assumptions (5%, 10%, 25%),2 and then added OpenAI and Anthropic to the mix to test the impact of all three.3
Outsized simulated performance, constrained by weight
Despite a trillion-dollar-plus valuation, SpaceX's simulated weight in the MSCI USA Index only reached 58 basis points (bps) by April 30, 2026, at 25% float,4 limiting its index-return contribution to 12 bps annualized during the data period, even when SpaceX’s annualized performance of roughly 90% outpaced the MSCI USA Index’s 22%. The three-company basket delivered similar dynamics with a combined weight under 1.2%. For context, Nvidia alone was 7.7% of the MSCI USA Index in April 2026.
In both scenarios, total risk of the index barely moved. Existing concentration absorbed the additions without altering the index’s volatility profile.
Tracking error rose with valuations
While the index’s return and risk were largely unchanged, simulated tracking error from active positioning was material. At 25% float, underweighting SpaceX generated 56 bps of tracking error, while underweighting the basket generated 59 bps over the simulation period, meaningful within typical risk budgets.5 That still understates the more recent risk levels: As valuations surged, the rolling 1-year tracking error for the basket at a 25% float averaged 72 bps over the past six months. At extremes (3 standard deviations), this could translate to a significant active-return impact.
Even at high valuations, constrained free-float would have kept the footprint of the Megacap IPOs small. But for active and indexed managers alike, the portfolio-level consequences could be substantial.
Feb. 28, 2023, to April 30, 2026. Gross returns in USD. Return and risk of the full period are annualized. Risk and tracking error are based on monthly returns. Tracking errors are with reference to the MSCI USA Index.
The returns and weights are based on prices and valuations sourced from PM Insights. For the total risk and tracking error of the simulated MSCI USA+SpaceX and MSCI USA+basket indexes, we modeled the volatility of SpaceX, OpenAI and Anthropic based on Nvidia's market beta and idiosyncratic risk in the first year following its IPO. Specifically, the idiosyncratic returns of SpaceX, OpenAI and Anthropic are rescaled to match Nvidia's idiosyncratic risk in its first year, with a beta term applied using Nvidia's first year beta.
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SpaceX is up 149% in the last 6 months as IPO valuation estimates approach $1.8 Trillion | PM Insights
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1 We used the MSCI USA Index rather than a broader benchmark such as the MSCI ACWI IMI in this analysis. Given that SpaceX's simulated weight and index-level impact are already small within the MSCI USA Index, the effect on a global index would be smaller still, making the U.S. index the more informative lens for this analysis.
2 While SpaceX is expected to list with low free-float, float availability may increase once the post-IPO lockup periods expire.
3 IPOs were added as an additional constituent to the MSCI USA Index without adjusting the global minimum size requirement under the MSCI Global Investable Market. Private company valuations and price data are sourced from PM Insights (now part of MSCI).
4 At 25% float, SpaceX's simulated weight within communications services within the MSCI USA Index would have been 4.8%, as of March 2026 rebalance.
5 Since the volatility of private equity prices has tended to be lower than for public equites, we calibrated the volatility of SpaceX, OpenAI and Anthropic to reflect a market beta and idiosyncratic risk profile comparable to Nvidia's in the year following its IPO. Because three companies are modelled the same way, diversification effects diminish with each addition — leaving basket-level tracking error broadly comparable to that of SpaceX alone.
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