The impending SpaceX initial public offering (IPO) has some investors looking for a liftoff in their index funds and ETFs—even as others brace for potential volatility.

While Vanguard’s index products will purchase shares in SpaceX in the days and weeks following the IPO launch, we will take a more grounded approach. Investors should understand that index rules, which govern the Vanguard products that seek to track them, will require a measured incorporation of stock from any new public company.

Investors should be reminded that in addition to diversification, low costs, and transparency, one of indexing’s core principles is to let markets, not hype, settle the outcomes.

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