You’d have a hard time finding three initial public offerings (IPOs) as anticipated as those from SpaceX, OpenAI, and Anthropic. With the artificial intelligence (AI) boom in full force, these companies have become some of the world’s most talked-about, and they’re getting ready to take their talents to public markets.
SpaceX is aiming for the largest IPO in history with a planned date of June 12; OpenAI’s IPO will likely be later this year or in early 2027; and Anthropic recently filed for an IPO after raising $65 billion in its latest round. While the prospect of owning these stocks may sound appealing, there’s no need for investors to try to jump in on Day 1 or even to buy the stocks individually. Arguably the best way to get in on all three is through an index-tracking exchange-traded fund such as the Vanguard S&P 500 ETF (VOO 2.60%) or a broad market ETF like the Vanguard Total Stock Market ETF (VTI 2.58%).
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These stocks may be in your index sooner than you think
There had been controversy surrounding the S&P Dow Jones Indices potentially altering its rules to fast-track companies like SpaceX into indexes such as the S&P 500 (^GSPC 2.64%). And the company announced on June 4 that it won’t make any changes to its rules and thus — among other criteria — IPOs will have to be traded on an eligible exchange for at least 12 months before being considered for addition to the S&P 500.
However, the Nasdaq-100 and Russell 1000 did update their rules to let IPOs in faster, so investors buying funds that track those indexes could be getting a piece of these hot IPOs fairly soon after their debut. There are also funds like the Vanguard Total Stock Market ETF that track the full market, giving you a piece of a lot of stocks.
History hasn’t typically been on the side of blockbuster IPOs in the immediate aftermath of their market debuts, so getting exposure to them through a broad ETF is a smart choice. VOO contains only around 500 of the largest American companies, while VTI includes virtually every American company trading on the market.
Although there’s a huge difference in the number of holdings between them (505 versus 3,494), their performances are similar because their top holdings overlap and account for a large share of each ETF.
It isn’t clear when SpaceX, OpenAI, or Anthropic will officially be included in all the indexes, but if you want exposure to them without taking on the added risk that typically comes with huge IPOs, VOO and VTI are good options to consider.
Stefon Walters has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.
