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Very few 401ks offer the NASDAQ 100 as an investment option. Last I checked it was <1%.

alemanek 4mo ago
Total market indexes and target date funds will include this and SpaceX on float adjusted basis I believe. The blast radius is much larger than funds that track the NASDAQ directly.
- chasd00 4mo ago
  But isn't that what "total market" means? I don't see how if you invest in a total market fund you could declare "except for SpaceX, Anthropic and OpenAI". Why is it so bad for these accounts to be invested in these companies anyway? Seems pretty typical, i bet all kinds of companies are added to total market indexes each year.
  - alemanek 4mo ago
    Until recently companies that IPOed weren’t immediately added to the major indexes so there was a longer period for price discovery. This year that changed; so you have retirement funds that typically are more conservative acting as exit liquidity for these massive IPOs. I would have less of an issue if the inclusion in major indexes was delayed 6-12months but we are looking at inclusion within like 5 days for some of these indexes.
    - tonfa 4mo ago
      The float will get bigger as you wait tho, since it's common for early investors to be locked for e.g. 6 months. You can argue it's better to smooth the entry as float gets unlocked rather than being front run by all the hedge funds in a single day on a massive capitalization.
      - ojbyrne 4mo ago
        The lockup periods are also being fiddled with: https://finance.yahoo.com/markets/stocks/articles/spacex-ipo-lock-structure-lets-140626263.html https://finance.yahoo.com/markets/stocks/articles/spacex-ipo...
nostrademons 4mo ago
Apparently the rule change also affects CRSP, which is the index behind Vanguard's Total Stock Market (VTI) index funds. https://finance.yahoo.com/markets/stocks/articles/spacex-ipo-could-hit-popular-101500534.html https://finance.yahoo.com/markets/stocks/articles/spacex-ipo... VTI in turn is the primary holding of most of Vanguard's Target Date retirement funds, which are widely held in 401ks.
- throw0101c 4mo ago
  Recent changes: > CRSP indexes were also recently changed to better accommodate fast entry. New IPOs are eligible for CRSP's suite of indexes after five trading days, provided they pass the index's eligibility and investability screens. Previously, these screens included having at least 10% of shares qualifying as freely tradeable (known as float shares outstanding, or FSO). However, in April the methodology changed to allow stocks with either 10% FSO or approximately $3.3 billion in float-adjusted market capitalization to be eligible for index inclusion. The weighting of stocks in CRSP indexes is also based on free float, which should help address the investability challenges associated with thinly traded stocks. * https://www.schwab.com/learn/story/some-indexes-accelerate-entry-massive-ipos https://www.schwab.com/learn/story/some-indexes-accelerate-e...
- lbrandy 4mo ago
  NASDAQ index has a 3x float weighting (and a far, far smaller total capitalization) which makes it far more susceptible. Other indexes do not have these multipliers, and are much larger. The exposure for e.g. VTI is far, far less.
reactordev 4mo ago
No but your funds are backed by ones that are

Total market indexes and target date funds will include this and SpaceX on float adjusted basis I believe. The blast radius is much larger than funds that track the NASDAQ directly.

chasd00 4mo ago
But isn't that what "total market" means? I don't see how if you invest in a total market fund you could declare "except for SpaceX, Anthropic and OpenAI". Why is it so bad for these accounts to be invested in these companies anyway? Seems pretty typical, i bet all kinds of companies are added to total market indexes each year.
- alemanek 4mo ago
  Until recently companies that IPOed weren’t immediately added to the major indexes so there was a longer period for price discovery. This year that changed; so you have retirement funds that typically are more conservative acting as exit liquidity for these massive IPOs. I would have less of an issue if the inclusion in major indexes was delayed 6-12months but we are looking at inclusion within like 5 days for some of these indexes.
  - tonfa 4mo ago
    The float will get bigger as you wait tho, since it's common for early investors to be locked for e.g. 6 months. You can argue it's better to smooth the entry as float gets unlocked rather than being front run by all the hedge funds in a single day on a massive capitalization.
    - ojbyrne 4mo ago
      The lockup periods are also being fiddled with: https://finance.yahoo.com/markets/stocks/articles/spacex-ipo-lock-structure-lets-140626263.html https://finance.yahoo.com/markets/stocks/articles/spacex-ipo...

nostrademons 4mo ago

Apparently the rule change also affects CRSP, which is the index behind Vanguard's Total Stock Market (VTI) index funds. https://finance.yahoo.com/markets/stocks/articles/spacex-ipo-could-hit-popular-101500534.html https://finance.yahoo.com/markets/stocks/articles/spacex-ipo... VTI in turn is the primary holding of most of Vanguard's Target Date retirement funds, which are widely held in 401ks.

throw0101c 4mo ago
Recent changes: > CRSP indexes were also recently changed to better accommodate fast entry. New IPOs are eligible for CRSP's suite of indexes after five trading days, provided they pass the index's eligibility and investability screens. Previously, these screens included having at least 10% of shares qualifying as freely tradeable (known as float shares outstanding, or FSO). However, in April the methodology changed to allow stocks with either 10% FSO or approximately $3.3 billion in float-adjusted market capitalization to be eligible for index inclusion. The weighting of stocks in CRSP indexes is also based on free float, which should help address the investability challenges associated with thinly traded stocks. * https://www.schwab.com/learn/story/some-indexes-accelerate-entry-massive-ipos https://www.schwab.com/learn/story/some-indexes-accelerate-e...
lbrandy 4mo ago
NASDAQ index has a 3x float weighting (and a far, far smaller total capitalization) which makes it far more susceptible. Other indexes do not have these multipliers, and are much larger. The exposure for e.g. VTI is far, far less.

reactordev 4mo ago

No but your funds are backed by ones that are