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Analysis: If SpaceX Is Included in Mainstream Indices, Passive Funds May Be Forced to Assume the Risk of Highly Volatile Assets
Svmuu News: With SpaceX set to be included in several major index series, passive investors may find themselves holding the stock without intending to, thereby being forced to assume significantly increased portfolio volatility risk. Several index providers—including CRSP, Nasdaq, FTSE Russell, and MSCI—have already adjusted their rules to accommodate SpaceX’s inclusion in major indices. Analysts point out that, with SpaceX’s current implied volatility nearing 120%—roughly three times that of the Bitcoin-related ETFs (such as IBIT)—it will become one of the most volatile components in both the S&P 500 and the Nasdaq 100.Industry insiders note that once large ETFs (such as the Vanguard Growth Index Fund) passively gain exposure to SpaceX, it will significantly increase the overall volatility of the indices, sparking controversy over “passive investors being forced to hold high-risk assets.” However, some argue that as SpaceX enters the index system, sustained passive capital inflows and market-making mechanisms may reduce its extreme volatility in the medium to long term and enhance liquidity stability. (CNBC)
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