For years the most comfortable rule of investing went like this: buy a world ETF, put it away, done. You don't have to understand anything or pick anything — the index simply mirrors "the market". That very convenience is exactly what's breaking right now.
What set me off was an article in the Financial Times — and a YouTube video showing how index rules were rewritten specifically for SpaceX's stock-market debut, so the share would slide into the big indices faster. According to Reuters, Elon Musk even made his listing conditional on being added quickly to the headline index. And the next candidates are already lined up: OpenAI and Anthropic are expected to go public this year, at enormous valuations. Since then I look much more closely at what an index actually buys on my behalf.
What this is about
The trigger is SpaceX's IPO. A series of opaque funding rounds has "valued" the company at 1.25 trillion dollars, and the listing is meant to happen at 1.75 trillion — on roughly 19 billion dollars of revenue (mostly Starlink and government contracts) and probably losses now that it's also bankrolling xAI. In short: an extremely expensive piece of paper that almost nobody would buy on fundamentals at that price.
And here's where it gets interesting. Whoever tracks an index has to buy whatever is in it — no matter the price. The S&P 500 alone has around 24 trillion dollars riding on it. When a stock is newly added, a wave of forced buying happens automatically. That mechanism is exactly what the whole manoeuvre is aiming at: Musk has found a way to make millions of people invest in SpaceX whether they want to or not.
Who bent the rules — and who didn't
Several index providers played along. Nasdaq lets SpaceX in after just 15 trading days, FTSE after five, MSCI after ten, and Morningstar CRSP even lowered its minimum free-float hurdle purely to be able to admit the company. The awkward part: Nasdaq is both a stock exchange and an index provider — so it earns from the listing and writes the rules by which the stock enters the index.
One said no: S&P Dow Jones. On 5 June 2026 the index committee decided: no change. The old rules stay — twelve months of trading history, at least ten per cent free float, and four consecutive quarters of real profit. SpaceX meets none of that. So the company won't land in the S&P 500 for at least a year, and maybe never.
What this means for my ETF choice
Concretely: a FTSE All-World ETF — the classic "world ETF" like VWRL — will automatically drop SpaceX into my portfolio the moment the company goes public. The S&P 500 won't. And that's exactly why I no longer buy the world ETF.
My plan is simple. I save monthly into an S&P 500 ETF — the US is running hot anyway, and the index stays comparatively "clean" thanks to its strict rules. On top of that I take a second ETF for the rest of the world, with the US excluded. That way I get both: American heavyweights and global diversification — just without the all-world pot that tips SpaceX (and, at future IPOs, possibly OpenAI or Anthropic) into my account through the back door.
Distributing, by the way — I like seeing the dividends land visibly in my account instead of being silently reinvested. A matter of taste, but it's mine.
The real point
It's bigger than SpaceX. "Passive" always counted as neutral: the index just reflects what's already there. Today indices are actively reshaped, because billions in forced buying hang on them — and suddenly it's the methodology, not the market, that decides what you own.
You can hardly rely on that anymore. You have to look again: which index? which rules? who gets in — and why right now? The comfortable line "just buy the world" no longer holds. Choose your index wisely.