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S&P Indices Won't Change Eligibility Methodology for Mega-Caps

S&P Indices Won't Change Eligibility Methodology for Mega-Caps

Bo
BostonFI · · 2 replies

For anyone following the news about mega-cap companies like SpaceX, OpenAI and Anthropic going public, you might be interested to know that S&P Dow Jones Indices announced yesterday they will not change the eligibility requirements for inclusion in S&P indices for mega-cap companies.

In the near term, this means neither SpaceX nor OpenAI will be included in S&P index funds anytime soon due to their lack of profitability. Anthropic is projected to be (barely) profitable sometime in 2026 however the 12 month waiting period will keep it out of S&P indices during 2026. NASDAQ 100, FTSE Russell and CRSP have changed their eligibility rules to fast track mega-caps. MSCI has pre-existing fast track rules for mega-caps.

Excerpt:

Based on S&P DJI's Index Committee review of the markets and after consideration of responses received from a wide range of market participants, no changes will be made to the eligibility criteria including financial viability screens, seasoning period, or minimum IWF, for the S&P 500, S&P MidCap 400, or S&P SmallCap 600 as a result of the S&P Dow Jones Indices consultation on the treatment of MegaCap companies. Accordingly, there will be no changes to existing methodology for this index family.

S&P DJI determined that exceptions to the financial viability, seasoning, and IWF requirements should not be granted solely based on market capitalization. The decision not to adopt the proposed exceptions preserves core index principles by maintaining consistent application of these key requirements. Although there may be trade-offs between strict adherence to these eligibility requirements and broad representativeness, the current methodology provides substantial market coverage and sector balance. As a result, the indices can continue to meet their stated objectives while preserving their role as representative and investable benchmarks for the U.S. equity market.

The full press release is here .

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Replies (2)

Drshoe28

Drshoe28

1 day ago

Great decision. It's nice to see the rules applying to everyone!

Roberto Sánchez

Roberto Sánchez

1 day ago

It's good to hear that the sky isn't falling.

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