Major US equity indexes IPO treatments
About this piece
This piece compares IPO treatment across five major US equity indexes, including fast entry exceptions to standard rules.
The summary table covers the current rules as of June 2026. Please see individual sections for more specific detail on individual index methodologies.
Key index developments in 2026
In May 2026, the Nasdaq-100 Index updated its methodology to add a Fast Entry rule for initial public offerings (IPOs) meeting certain criteria. This update has reignited interest in how different major US equity indexes, such as the S&P 500 and Russell 1000, handle the eligibility, inclusion, weighting, and timing of these securities.
The table below summarizes the current treatment of IPO securities by different major US equity indexes. After issuing a consultation and reviewing feedback, FTSE Russell updated the methodology for the Russell US Equity Indexes, effective May 26, 2026. Additionally, please note that S&P Dow Jones Indices issued a consultation on possible updates to the S&P U.S. Indices methodologies, but on June 4, 2026, announced that there would be no changes to the S&P 500 methodology1.
Index Treatment of IPO Securities
| Feature | S&P 500 | Nasdaq-100 | Russell 1000 | MSCI USA | CRSP US Total Market |
|---|---|---|---|---|---|
| IPO Fast Entry | No | Yes | Yes | Yes | Yes |
| Fast Entry Threshold | N/A | Full market cap in top 40 of current index constituents | Investable market cap greater than Russell Top 500 breakpoint | Full market cap >= 1.8x MSCI large/mid-cap size cutoff | Full market cap greater than CRSP US Small Cap breakpoint |
| Fast Entry Timing | N/A | ~15 trading days | ~5 trading days | ~10 trading days | ~5 trading days |
| Seasoning Requirement | 12 months | 3 calendar months (waived for fast entry) | None | 3 months (waived for fast entry) | 20 trading days |
| Standard IPO Inclusion Timing | At Index Committee discretion (12+ months) | ~3-15 months (December annual reconstitution) | ~2-5 months (quarterly index maintenance) | ~3-6 months (quarterly index maintenance) | ~2-5 months (quarterly index maintenance) |
| Float Requirement | ~10% minimum | None | 5% minimum | Relative minimum (float-adjusted market cap >= 50% of minimum size requirement) | 10% minimum for Fast Entry, 12.5% for others |
| Alternative to Float Requirement | None | N/A | IPOs estimated to surpass 5% float within 12 months from index inclusion due to expiry of lock ups | N/A | Float-adjusted market cap represents at least 0.005% of float-adjusted market cap of index-eligible universe |
| Weighting | Float-adjusted market cap | Modified listed market cap | Float-adjusted market cap | Float-adjusted market cap | Float-adjusted market cap |
Note that the MSCI USA Index is categorized within MSCI Global Investable Market Indexes, not as an MSCI US Equity Index. The MSCI US Equity Index family has different rules and requirements. See “Appendix Information” for sources.
S&P 5002
Standard IPO inclusion path
Securities must trade on an eligible exchange for at least 12 months before being considered for index inclusion. Final constituent selection is at the discretion of the Index Committee, even after satisfying all eligibility criteria.
Fast entry rules for certain IPOs
None.
Minimum requirements for index inclusion
Securities must pass a financial viability screen (positive GAAP net income from continuing operations in the most recent quarter and in the sum of the most recent four quarters) and maintain an Investable Weight Factor of at least 0.1 (i.e., minimum ~10% float). There is no Fast Entry exception to these rules.
S&P 5001 (cont.)
Eligibility sizing
Eligibility for index inclusion for all securities, including IPOs, is based on total market capitalization, which includes listed and unlisted shares.
Weighting
Securities are weighted by float-adjusted market capitalization, which is calculated based on security price, shares outstanding, and investable weight factor.
Nasdaq-1003,4
Standard IPO inclusion path
Securities must trade on an eligible exchange for at least three full calendar months before inclusion. This seasoning requirement has been in place since 2012.
Fast entry rules for certain IPOs
Companies with full market capitalizations (listed and unlisted shares) within the top 40 of current index constituents may bypass the three-month seasoning requirement. Securities are assessed for inclusion at the end of their 7th trading day, announced after the 10th, and added after the 15th.
This fast entry timeline also applies to companies that have changed their exchange listing. Fast entry additions do not require the removal of another index constituent.
Minimum requirements for index inclusion
The previous minimum 10% float requirement that was introduced in June 2024 has been eliminated. The modified market capitalization weighting methodology (see below) addresses investability for low-float securities.
Eligibility sizing
Securities, including fast entry IPOs, are assessed for index inclusion and size categorization based on their full market capitalization.
Weighting
Securities are weighted by modified market capitalization, not float-adjusted market capitalization.
Modified market capitalization is calculated as the lesser of price times total shares outstanding, or price times free-floating shares times three, effectively capping any security’s weight at 3x its float. Securities with float above 33.3% are weighted at full eligible listed market cap, while those with less than 33.3% float are weighted proportionally less. This applies to all constituents, not just fast entry securities.
The prior weighting methodology (weighting by market cap), when combined with the 10% float minimum, could produce edge cases where a low-float security’s index weight was up to 10x its free float.
Russell 10005,6
Standard IPO inclusion path
IPOs are added during quarterly index maintenance, based on their listing date relative to the index’s rank day (the last business day of January, April, July, or October). June and December additions coincide with the semiannual reconstitutions, while March and September additions take effect after close on the third Friday of the month. Typical timing from IPO to index inclusion is therefore ~2-5 months; there is no explicit seasoning requirement outside of this timeline.
Fast entry rules for certain IPOs
Effective May 26, 2026, Russell US Equity Indexes added a fast entry rule for certain IPOs. To be eligible, IPOs must have investable market caps (i.e, float market caps) greater than the market-adjusted total market capitalization breakpoint for the Russell Top 500 as of the previous reconstitution, based on price and free float shares outstanding at the end of the IPO’s first day of trading. Eligible IPOs will be added to the relevant indexes after their fifth day of trading.
Minimum requirements for index inclusion
Securities must meet 5% minimum free float and 5% voting rights thresholds to be eligible for index inclusion. As of May 2026, these thresholds are waived for fast entry IPOs if lock-up expirations are expected to bring the amounts above 5% within 12 months of the date of index inclusion.
Eligibility sizing
Generally, securities are assessed for index eligibility and size category based on their total market capitalization. However, an IPO’s eligibility for inclusion as a fast entry is based on its investable market cap.
Weighting
Securities, including fast entry IPOs, are weighted by float-adjusted market capitalization.
MSCI USA7,8
Standard IPO inclusion path
The MSCI USA Index is constructed under the MSCI Global Investable Market Indexes (GIMI) methodology. Newly listed securities that do not qualify for fast entry are considered for inclusion during quarterly Index Reviews, subject to a seasoning period of at least three calendar months.
Fast entry rules for certain IPOs
IPOs may qualify for early inclusion if, as of the close of their first or second trading day, their full market capitalization is at least 1.8 times the Standard Size-Segment Cutoff (the market cap threshold separating the large/mid-cap universe from the small-cap universe) for the US and their free float-adjusted market capitalization is at least 1.8 times one-half of this cutoff. Eligible fast entry IPOs are added as of the close of their tenth trading day.
Cutoffs are defined relative to the Market Investable Equity Universe. For the MSCI USA Index, the Standard Size-Segment Cutoff would be calculated relative to US equities and is roughly the full market capitalization of the smallest security among those that account for 85% of the eligible free float-adjusted market capitalization within the US.
Minimum requirements for index inclusion
A security’s free float-adjusted market capitalization must be at least 50% of the minimum size requirement for the relevant market. The three-month seasoning period is waived for fast entry IPOs.
Eligibility sizing
Securities, including fast entry IPOs, are assessed for index inclusion and size categorization based on their full market capitalization.
Weighting
Securities, including fast entry IPOs, are weighted by float-adjusted market capitalization.
MSCI index families
The MSCI USA Index is constructed under the MSCI Global Investable Market Indexes (GIMI) methodology, which is a separate index family from the MSCI US Equity Indexes, which follow a different methodology with different eligibility and inclusion rules and timing. The rules summarized above apply to indexes in the MSCI Global Investable Market Indexes family only.
CRSP US Total Market9
Standard IPO inclusion path
Securities must trade on an eligible exchange for at least 20 trading days prior to the ranking day. If they meet all other relevant index criteria, they are added at the next quarterly index maintenance event.
Fast entry rules for certain IPOs
IPOs are eligible for fast entry if their total market capitalization (shares outstanding times first-day closing price) is at least as large as the breakpoint of the CRSP US Small Cap Index. If an IPO meets this threshold, it may be added to the appropriate indexes after the close of its fifth day of trading.
Minimum requirements for index inclusion
Securities must meet a 12.5% minimum float requirement (10% minimum for fast entry IPOs). Alternatively, a security’s float-adjusted market cap must be at least 0.005%, or ½ bps, of the float-adjusted market cap of the index-eligible universe.
Eligibility sizing
Securities, including fast entry IPOs, are assessed for index inclusion and size categorization based on their full market capitalization.
Weighting
Securities, including fast entry IPOs, are weighted by float-adjusted market capitalization.
Investment Risks
The value of investments and any income will fluctuate (this may partly be the result of exchange-rate fluctuations), and investors may not get back the full amount invested.
Important information
This does not constitute a recommendation of any investment strategy or product for a particular investor. Investors should consult a financial professional before making any investment decisions. The mention of specific companies, industries, sectors, or issuers does not constitute a recommendation by Invesco Ltd. and its subsidiaries.
