Marvell joins the S&P 500: How passive funds are "forced to buy"? A 40-year historical backtest reveals index effects

On June 5, 2026, S&P Dow Jones Indices officially announced that Marvell Technology (MRVL) would be included in the S&P 500 index before the market opens on June 22. This is not only a milestone event marking the mainstream inclusion of leading companies in the AI infrastructure sector but also means that passive funds tracking the S&P 500, totaling over $20 trillion globally, will need to concentrate their purchases of MRVL shares during the quarterly rebalancing window, forming a quantifiable short-term incremental capital inflow mechanism. Is this “index inclusion effect” purely a pulse in the capital flow, or a long-term alpha source that can be captured?

Inclusion Event: How an AI Chip Company Can Reach the Gates of the S&P 500

The eligibility criteria for the S&P 500 index include two core hard metrics: first, having a sufficient market capitalization; second, maintaining positive GAAP net profit for four consecutive quarters. Previously, Marvell had been on the index candidate list multiple times, but profitability tests once posed a barrier.

This threshold was officially crossed in fiscal year 2026 (ending January 31, 2026). According to Marvell’s financial report, the company’s full-year net income for FY2026 reached $200k, up 42% year-over-year, with GAAP diluted earnings per share of $3.07, an 81% increase from the previous year. In the first quarter of FY2027 (ending April 30, 2026), net income was $8.2B, up 28%. The core driver of this threshold crossing is the AI data center business — which generated over $6.1 billion in revenue in FY2026, a 46% increase.

On the day of the announcement, Marvell’s stock price rose about 6% after hours, and the market quickly priced in the inclusion effect. Jensen Huang publicly stated at Computex that Marvell would become the next trillion-dollar chip company, and NVIDIA has made a $2 billion strategic investment in Marvell. The two sides are deepening cooperation on silicon photonics technology around the NVLink Fusion platform to jointly advance the interconnection infrastructure for the next generation of AI infrastructure.

The “Mandatory Buy” Mechanism of Passive Funds: Why Index Tracking Funds Must Buy

The price impact of being included in the S&P 500 index mainly stems from the structural rules of the passive investment ecosystem. When a company is added to the S&P 500, all funds tracking that index—including ETFs and index mutual funds—must buy the newly added shares before the effective date of the index rebalancing. This rule is a mandatory contractual arrangement embedded in the fund’s structure, not dependent on the subjective judgment of fund managers, but an institutional buy order.

As of June 2026, the total passive assets tracking the S&P 500 exceeded $20 trillion. Taking the three largest ETFs tracking the index as examples: Vanguard’s VOO managed over $1 trillion by 2026, iShares’ IVV about $859.5 billion, and State Street’s SPY about $784.6 billion. The combined assets of these three ETFs surpass $2.64 trillion, and they are only part of the total tracking pool. Additionally, numerous mutual funds, pension plans, insurance assets, and overseas investment portfolios tracking the S&P 500 are also subject to this rule.

The calculation for capital inflow is: Marvell’s index weight multiplied by the total passive assets tracking the S&P 500 globally. Based on the current approximate total market cap of the S&P 500 (~$6 trillion) and Marvell’s free float market cap (~$230 billion), the index weight is about 0.38%. Combining this with the over $20 trillion in passive assets, the active buy-in volume for MRVL during the adjustment window is roughly $70–80 billion. It’s important to note that this estimate is a reasoned projection based on the public index methodology; the actual weight will be finalized by S&P Dow Jones at the time of inclusion, and the actual purchase amount will also be influenced by stock prices before and after inclusion. Nonetheless, the scale is sufficient to materially impact MRVL’s supply-demand structure in the short term.

Regarding the buy window, according to S&P Dow Jones, the adjustment will take effect before the market opens on June 22, 2026. Index funds typically complete their portfolio rebalancing over the weekend from the close on June 19 (Friday) to the open on June 22. This highly concentrated buy window, combined with the magnitude of the inclusion weight, forms a complete transmission chain from index inclusion to capital inflow to stock price impact.

Backtesting the Historical Inclusion Effect: 40 Years of Data Reveals Statistical Patterns

Academic and Wall Street research has accumulated extensive empirical data on excess returns following S&P 500 inclusion. Multiple studies covering 1980–2020 have systematically backtested the inclusion effect, revealing the following statistical regularities.

In the 1980s, stocks that were included typically gained about 3–4% excess returns, while those removed declined about 4–5%. The 1990s marked the peak of the inclusion effect, with included stocks gaining about 7–8% excess returns, and removed stocks declining around 16%. In the 2000s, the effect waned, with included stocks gaining about 5% excess, and the decline of excluded stocks narrowing to about 12%. From 2010 to 2020, the excess return for included stocks dropped below 1%, and the decline for excluded stocks also shrank to less than 1%, statistically rendering the null hypothesis of “no excess return” unrejectable. During the same period, the inclusion effects of Russell 1000, Russell 2000, NASDAQ 100, and other mid- and small-cap indices also showed a highly consistent downward trend.

The mechanisms behind the diminishing effect are explained mainly by two factors: first, the explosive growth of passive investment has attracted large arbitrage capital to front-run the event, causing much of the excess return to be realized before the official announcement; second, the increased predictability of index rebalancing allows market participants to anticipate the inclusion and position themselves early, front-loading the price discovery process. Overall, the inclusion event still exerts a positive directional influence, with excess returns observable around the announcement window, but the magnitude has significantly shrunk since the 1990s. The excess returns are now more concentrated in the window before and after the announcement rather than after the effective date. At the individual stock level, large-cap companies tend to show more stable effects, while small- and mid-cap stocks often revert to the mean after inclusion.

How to Use Gate Stocks and USDT to Participate in MRVL Trading Directly

For cryptocurrency investors holding USDT, the passive capital inflow triggered by Marvell’s inclusion in the S&P 500 creates a quantifiable investment event window. Gate recently launched a real US stock trading feature, providing a seamless way for crypto users to directly participate in MRVL and other US stocks.

Product Coverage

Gate stocks support users trading over 10k US-listed stocks and ETFs directly with USDT, covering major US exchanges such as NYSE, NASDAQ, NYSE Arca, NYSE American, and BATS. This means users do not need to convert to USD or open separate overseas brokerage accounts—they can invest in MRVL using their existing USDT balances.

Trading Thresholds and Fees

Gate supports fractional trading starting from as low as 0.01 shares, especially suitable for high-priced stocks like MRVL. The current stock price is relatively high, and fractional trading significantly lowers the capital barrier for retail investors. Regarding fees, Gate has integrated a VIP tier system: holding at least $2,000 USDT upgrades users to VIP status, enjoying a discounted fee rate as low as 0.023%.

Settlement Mechanism

Trades are settled in real-time in USDT, with no overnight holding fees or funding rates. For investors planning to hold positions through the inclusion window, costs are transparent and manageable. Dividends are automatically settled in USDT.

Compliance and Security

Gate partners with licensed US broker-dealer Alpaca, providing a direct connection to US securities infrastructure. User stock holdings are custodied by regulated broker partners, making them real, transferable assets.

Operational Workflow

After completing KYC, users can transfer USDT into their stock account via the Gate app’s TradFi or stock trading section, then search “MRVL” to start trading. Orders can be placed pre-market and after-hours, covering approximately 16 hours of trading, especially suitable for strategic positioning around announcement dates.

Conclusion

In summary, Marvell’s inclusion in the S&P 500 effective June 22, 2026, has three analytical layers. From a data perspective, over $20 trillion tracking the index globally and Marvell’s approximate 0.38% weight form a clear scale of capital flow. From a historical perspective, 40 years of academic data show that inclusion events generally produce positive excess returns around the announcement window, but the effect has significantly diminished since the 1990s, with higher demands on timing precision and lower magnitude. From a practical standpoint, Gate stocks enable USDT-based trading of US stocks, fractional trading, and low-cost fees, providing crypto users with an efficient way to access the index inclusion event.

However, certain constraints should be noted: first, stock prices may already partially or fully reflect expectations before the announcement, limiting the price increase on the effective date; second, after the passive buy-in window is completed, the pulse-like nature of incremental capital inflows may cause short-term price reversals—“buy the rumor, sell the news.” Third, the excess returns observed in academic studies are averages; their applicability to Marvell depends on valuation levels, AI industry cycles, and overall market risk appetite. Fourth, Gate’s stock trading service availability depends on regional compliance, and some users may be unable to access it.

Against the backdrop of sustained market attention on the AI infrastructure industry chain, index inclusion offers a perspective to evaluate the allocation value of AI chip stocks from a passive capital mechanism. Investors can assess trading opportunities within this window based on their capital scale, holding period, and risk appetite.