SpaceX Slump Exposes ETF Investors' Late-Entry Problem — SkimNews
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- Atul Tiwari, founding president of BMO ETFs and inaugural CEO of Vanguard Canada, writes that Bogle's 2012 objection to ETFs — that real-time exchange trading would tempt investors into market timing — was more profound than he appreciated at the time.
- SpaceX, after debuting at a valuation near US$2-trillion, has seen its stock slide to about US$135 a share from a peak of US$225 reached days after launch, illustrating how retail index buyers may enter after private-stage value creation.
- Single-stock ETFs have lost a median of 38 percent over the four-year period ended July 2026 while paying more than US$500-million in management fees, per Morningstar data cited in the article.
- Vanguard and BMO together now account for roughly 36 percent of the Canadian ETF market, with do-it-yourself investors in Canada holding a greater share of ETF assets than investment advisers.
- The number of publicly traded U.S. companies has fallen to 4,300 from approximately 7,000 over the past two decades, according to Northleaf Capital Partners, as venture capital and private credit keep firms private longer.
- Nasdaq recently amended its rules to accelerate inclusion of newly public companies such as SpaceX, while the S&P 500 chose not to make similar changes — a committee already determines S&P inclusion based on judgment, not just size.
- OpenAI and Anthropic are flagged in the piece as companies expected to eventually reach public markets, where retail index investors would then buy at the offering price after early private rounds captured most of the growth.
Why it matters: The original ETF promise was low-cost, passive market participation, but the proliferation of single-stock and thematic products — with median 38 percent losses and over $500 million in fees — plus the migration of growth-stage value creation into private markets (U.S. public-company count down to 4,300 from 7,000) means retail investors paying index-fund fees may be providing exit liquidity to earlier private backers rather than compounding alongside the economy's fastest-growing firms.
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