IPO inclusion rules for index funds - is anyone considering switching?
After watching this video from Ben Felix - https://youtu.be/iOyFja87uyw - I did some digging into the documents.
With the huge IPOs coming for SpaceX, Anthropic, etc. I was curious to see how quickly my funds would be forced to buy these stocks.
My notes so far:
| Fund | Index Provider | IPO Inclusion Timing |
|---|---|---|
| Vanguard FTSE Global All Cap | FTSE Russell | 5 days fast-entry |
| Vanguard VHVG | FTSE Russell | 5 days fast-entry |
| HSBC FTSE All-World | FTSE Russell | 5 days fast-entry |
| Invesco FTSE All-World | FTSE Russell | 5 days fast-entry |
| iShares Core MSCI World (SWDA) | MSCI | 10 days for large IPOs |
| iShares MSCI ACWI | MSCI | 10 days for large IPOs |
| Vanguard S&P 500 (VUSA) | S&P Dow Jones | 12 months* |
| iShares S&P 500 | S&P Dow Jones | 12 months* |
*S&P may soon reduce the 12-month requirement down to 6 months
There was another thread on this some time ago, but not much there: https://www.reddit.com/r/UKPersonalFinance/comments/1sd7i1z/where_to_find_specific_info_about_an_index_funds/
I know the advice is just to DCA into a low-cost passive index fund, but it seems not all index funds are created equal, and potentially you're paying an "IPO bounce" tax without realising it.
Is anyone considering switching from FTSE-tracking funds to alternatives with longer IPO delays?