Key Takeaways:
SpaceX shares have climbed about 25% in August, and seven of nine Vanguard ETFs added shares in July, per the fund manager's monthly disclosure.
"The pace of buying could surge in August as more shares are unlocked," said Daniel Foelber, a contributing analyst at The Motley Fool, who tracks the fund flows.
The Vanguard Communication Services ETF posted the largest increase, boosting its share count 33% to 842,835 shares, giving it the highest SpaceX weighting among the funds at 1.5%. The Vanguard Morningstar Total Stock Market ETF, the second-largest ETF in the world by net assets, added 53,439 shares, a 0.3% increase, with SpaceX representing just 0.09% of the fund. Two funds — the Vanguard Morningstar Growth ETF and Vanguard Morningstar Mega Cap Growth ETF — trimmed their positions.
SpaceX's market value across all nine Vanguard ETFs declined month over month even in funds that raised share counts, as the stock fell 37% in July before recovering. With another 7% of Early Release Eligible Shares unlocking Aug. 21, passively managed funds are expected to accelerate accumulation, and SpaceX is likely to become a top holding in the Vanguard Communication Services ETF.
SpaceX, which held its initial public offering June 12 at $135, is one of the 10 most valuable companies in the world with a market cap of $1.8 trillion as of Aug. 19. Yet its weightings in major ETFs remain small for two reasons.
First, SpaceX did not begin unlocking shares until two days after it reported second-quarter earnings Aug. 4. Although July was the first full month SpaceX was public, the supply of shares was virtually unchanged since the IPO. The fact that many Vanguard ETF holdings barely budged shows they entered large positions within weeks of the listing, then paused.
Second, the stock's 37% decline in July, as investors braced for the first wave of share unlocks and the company's first earnings call, weighed on the funds' market values. The shares fell to a low of $104.83 on Aug. 3 before staging a recovery.
The Vanguard Communication Services ETF is the fund with the largest percentage weighting in SpaceX at 1.5%. Vanguard classified SpaceX in the communications sector because the majority of its revenue comes from its Starlink network of low-Earth-orbit satellites and its ownership of the social media platform X and xAI.
As of Aug. 19, SpaceX's $1.8 trillion market cap puts it in second place in the fund behind Alphabet's $4.2 trillion but ahead of Meta Platforms' $1.4 trillion. SpaceX is weighted in ETFs at a multiple of its float, which will increase as more shares hit the Nasdaq and as the stock price rises.
Investors looking for an ETF in which SpaceX is likely to become a top holding in the coming months may want to examine the Vanguard Communication Services ETF.
The pattern of lightning-fast accumulation in planned blockbuster IPOs — followed by a lull until more shares are unlocked — is likely to repeat with Anthropic and OpenAI, which are expected to follow SpaceX to market. For SpaceX, the August recovery and continued share unlocks suggest passive funds will keep adding, pushing the stock's weightings higher across major ETFs.
This article is for informational purposes only and does not constitute investment advice.
