The Vanguard S&P 500 ETF has surpassed $1 trillion in net assets with a 0.03% expense ratio, but its index rules exclude private market giants like SpaceX and global semiconductor leaders like Taiwan Semiconductor Manufacturing, prompting some investors to look toward the Vanguard Total World Stock ETF instead.
Why the S&P 500 Index Rules Shut Out SpaceX and Anthropic
For investors relying on the world’s largest exchange-traded fund, tracking the S&P 500 means missing out on several high-profile private technology companies as they scale. S&P Dow Jones Indices rejected a proposal on June 4 to fast-track the inclusion of megacap companies into the S&P 500. Under current index requirements, any company must trade on an eligible exchange—such as Nasdaq or the New York Stock Exchange—for at least 12 months before consideration, regardless of its private market valuation.
This index lag directly affects upcoming initial public offerings. Space Exploration Technologies faces a waiting period that pushes its earliest possible S&P 500 inclusion date to June 2027. Meanwhile, Anthropic is expected to go public in November, and OpenAI anticipates an initial public offering early next year, which delays their potential S&P 500 eligibility until early 2028.
How the Vanguard Total World Stock ETF Captures Global Holdings
Unlike funds benchmarked strictly to the U.S. large-cap index, the Vanguard Total World Stock ETF operates under a broader mandate that allows it to accumulate private shares as they enter public markets. According to fund data, the global ETF began acquiring SpaceX shares gradually in June. As of August 31, the fund holds 453,258 shares of SpaceX, positioning it as the 261st largest holding in the portfolio.
Beyond private market access, the international scope of the Vanguard Total World Stock ETF exposes portfolios to critical non-U.S. hardware manufacturers driving artificial intelligence infrastructure. While North American companies account for 65.1% of its 10,088 total holdings, the fund includes major international semiconductor players that are absent from domestic-only large-cap indexes.
| Company | Ticker | Global ETF Ranking | Market Capitalization | Role in AI Supply Chain |
|---|---|---|---|---|
| Taiwan Semiconductor Manufacturing | TSM | 6th | $2.35 trillion | Pure-play foundry manufacturing logic chips for Nvidia, Apple, and others |
| Samsung Electronics | SSNLF | 13th | Over $1.2 trillion | Memory chip design and manufacturing |
| SK Hynix | SKHY | 16th | Over $1.2 trillion | High-bandwidth memory production |
| ASML | ASML | 18th | $686 billion | Lithography systems for advanced microchip printing |
Comparing Concentration and Costs Across Vanguard Funds
Both funds maintain low expense ratios designed to preserve long-term capital, but their underlying weightings differ significantly. The Vanguard S&P 500 ETF charges 0.03%—or $3 annually for every $10,000 invested—while the Vanguard Total World Stock ETF carries a 0.06% expense ratio, translating to $6 per $10,000. Yahoo Finance reported that the world stock fund offers broader diversification across its 10,088 holdings.
Concentration risk remains a key differentiator for large portfolios. The Vanguard S&P 500 ETF allocates 30% of its total weight to just five massive U.S. corporations: Nvidia, Apple, Alphabet, Microsoft, and Amazon. The Vanguard Total World Stock ETF features the exact same top five holdings, but with a reduced individual weighting, resulting in just 28.4% of total assets invested across its 20 largest holdings.
