By Daniel P. Wiener

In the pre-SpaceX days, it didn't really matter which major index benchmark an investor chose, whether it was constructed by Standard & Poor's, the Center for Research in Security Prices $(CRSP)$, or FTSE Russell. They all returned essentially the same amount.

Over the past 25 years the range of annualized returns for the S&P 500 index, the Russell 1000 index, and the CRSP US Large Cap indexes was 9.63% to 9.72%. In other words, after 2 1/2 decades, just 0.09 percentage point, or nine basis points, separated the best performer from the worst. In dollar terms, a $1,000 investment in each of the three indexes (had you been able to do so at zero expense) would have yielded terminal values that ranged from $9,880 to $10,090, a $200 difference.

That may not be the case as we move into 2027 because, as has been well-reported, S&P won't be adding SpaceX to its popular benchmark for at least a year, while CRSP and Russell are diving right in. Depending on how SpaceX stock performs -- and I'm of the opinion that there is going to be disappointment ahead for Elon Musk fans -- the S&P 500 and the billions of dollars indexed to it will outperform both the CRSP and Russell offerings.

As the big kahuna in ETFs, let's look at Vanguard. Its S&P 500 ETF could outpace both the Vanguard Russell 1000 ETF and Vanguard Large-Cap ETF (which tracks the CRSP US Large Cap Index) if SpaceX stock stumbles. If SpaceX keeps soaring, then the Vanguard S&P 500 ETF lags behind.

The same will hold even more true for the three large-cap growth ETFs Vanguard offers. Its Vanguard S&P 500 Growth ETF will outperform the Vanguard Russell 1000 Growth ETF and the CRSP-tracking Vanguard Growth ETF if SpaceX falls back to an earthly valuation.

What is an investor to do? Well, index investors tend to be believers in efficient markets and diversification. If you're holding a large position in an S&P-tracking index in your IRA you might want to sell half and buy either a CRSP or Russell version to hedge your bets. More critically, if you've got a large position in a taxable account and you're sitting on large unrealized gains, then it behooves you to build a non-S&P position in another account or in your IRA or other tax-deferred account where you won't be taxed for selling appreciated positions.

I can't tell you whether SpaceX will be a help or a hindrance for index trackers, but investors don't have to see their savings soar or plummet simply because of an oversize position in Elon Musk's money-losing conglomerate. You have choices.

Write to advisor.editors@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

June 22, 2026 13:47 ET (17:47 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.