SpaceX Inclusion in Schwab Value ETF Raises Style Drift Concerns

Key Facts

In a move reflecting the evolving flexibility of style-specific funds, the Schwab US Large-Cap Value ETF acquired a small position in SpaceX following its initial public offering. The ETF's current policy permits up to 10% of its assets to be held in securities that fall outside its core value methodology. This inclusion is viewed as a preemptive positioning for future index inclusion, despite SpaceX's profile as a high-growth company that currently lacks consistent profitability.

The decision raises concerns regarding "style drift" within value-oriented portfolios, as SpaceX is traditionally characterized as a growth play similar to peers like Tesla. Per market data, the SCHV ETF typically targets companies with low valuation multiples and stable cash flows, contrasting sharply with SpaceX’s capital-intensive nature. Analysts suggest that this move could signal a broader shift in how value managers approach dominant private-turned-public tech leaders.