Super Micro Has Lost 60.86% Since It Was Tapped for the S&P 500. Index Funds Like VOO Had to Buy It Anyway
Super Micro Has Lost 60.86% Since It Was Tapped for the S&P 500. Index Funds Like VOO Had to Buy It Anyway
Ryne MauckFri, October 23, 2026 at 12:03 AM UTC
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bigjom jom / Shutterstock.com (bigjom jom / Shutterstock.com)Quick Read -
SMCI has crashed 61% since VOO and other S&P 500 index funds were forced to buy it at $90.55, a price they had no choice but to accept.
Switching from VOO to IVV changes nothing because both track the same index and follow the identical inclusion buying schedule.
VOO holds 519 stocks across $1.675 trillion in assets, so one bad inclusion is a rounding error. That calculus changes when a hot stock joins at significant weight.
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On March 1, 2024, the day its addition to the S&P 500 was announced, Super Micro Computer (NASDAQ:SMCI) closed at a split-adjusted $90.55. As of October 21, 2026, it traded at $35.44. From that announcement close, the dividend-adjusted price change is -60.86%. If you own Vanguard S&P 500 ETF (NYSEARCA:VOO), your fund had to buy the stock anyway.
Look at the headlines from that day. CNBC wrote that Super Micro was joining the index after its price soared more than twentyfold in two years. Reuters reported that the shares surged on the news. The stock was announced for inclusion on March 1 and entered the index soon thereafter. The figures in this article all start from the announcement date, not from Super Micro's first day inside the index.
Your Fund's Rulebook Buys Stocks Without Judging the Price
Vanguard's April 28, 2026 prospectus spells out the mechanism clearly. The fund "attempts to replicate the Target Index by investing all, or substantially all, of its assets in the stocks that make up the Target Index, holding each stock in approximately the same proportion as its weighting in the Target Index."
Read that as a rule, because that is how the fund works. The announcement moves the price. Then the fund purchases after the news that raised the stock is already public. Index funds are price-takers (buyers who accept any price) at inclusion. They have no option to wait for a better entry.
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Your Fee Is Tiny, and Timing Never Appears on the Bill
The visible cost is minimal. Total annual expenses run 0.03%. The prospectus puts that at $3 in the first year on a $10,000 investment and $39 over 10 years, assuming a 5% annual return. Portfolio turnover was 1% in the first half of 2026, which keeps trading costs and tax drag low.
The fee line leaves out what the fund paid to own a stock just after the market had already priced in the good news. That cost shows up only in returns, and no factsheet lists it.
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One Holding Among Hundreds Has Limited Reach
Keep this in proportion. As of June 30, 2026, the fund held 519 stocks and $1,675,038 million in net assets. A single holding in a portfolio that size has limited effect on the whole fund. The ETF itself has returned 14.4% year-to-date and 16.58% over the past year.
Super Micro has also swung hard in both directions since the announcement. The stock is up 21.08% year-to-date, down 35.61% over the past year, and up nearly 9% during the October 21 session, after preliminary sales figures lifted AI stocks, according to Bloomberg. Some index additions rise after they join. Super Micro is one example of a structural feature. It does not prove a rule.
SMCI Price Target — 24/7 Wall St.
The same market-cap rules also pour money into whatever has already run. Information technology made up 38.0% of the fund's net assets at midyear. That concentration is a second cost an index buyer accepts without being asked.
Switching to a Twin Fund Leaves the Mechanism in Place
iShares Core S&P 500 ETF (NYSEARCA:IVV) tracks the same index, so it works on the same addition calendar. Changing issuers changes the logo, and the buying schedule remains the same. Avoiding post-inclusion timing would mean a fund whose managers judge prices, and that brings higher fees and a manager who can also be wrong. The rules that purchase Super Micro are the same rules that keep this fund cheap, diversified, and free of any manager's guesswork.
What This Means for Your Retirement Account
For a long-term holder adding money steadily, the cost of inclusion timing is usually a rounding error. It is part of what you get for paying $3 a year per $10,000. It starts to matter when a hot stock joins at a significant weight, or when the index's largest sector already represents nearly 40% of your portfolio. Index funds do sometimes buy at the wrong time, by design. The question worth asking is whether you understand when your index fund purchases, and whether you can live with that schedule.
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Contact editorial@247wallst.com for any questions or corrections.
Source: “AOL Money”
