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Comment by lovich

17 hours ago

It’s a public benchmark fund that has much of its value based on its decisions being publicly stable and publicly consistent.

Who would want to invest in a benchmark fund with arcane(the literal term as opposed to mundane) rules that were privately decided? If your statement is accurate it sounds like moving out of such a fund would be prudent. I feel like it’s not accurate since they are sticking to their guns and not changing the rules to benefit oligarchs like Musk such as Nasdaq is doing.

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lovich

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JumpCrisscross  17 hours ago

> Who would want to invest in a benchmark fund with arcane(the literal term as opposed to mundane) rules that were privately decided?

There are lots of rules-based funds. S&P is transparently committee based. It’s why dual-class new entrants are banned, but Google and Berkshire are grandfathered in.

There is a genuine debate on rules versus committees in the index world. But S&P has stuck to its guns as a bastion of the latter. And it works. Everyone picking the S&P 500 over its competitors chooses that.

  • maest  16 hours ago

    > Everyone picking the S&P 500 over its competitors chooses that.

    I'm fairly confident most people deciding to allocate to s&p trackers have no idea about rules-based vs committee-based governance. They just pick the default. And that default can quickly change if the S&P starts making weird/unpopular decisions in a highly publicized situation.

    • JumpCrisscross  15 hours ago

      > most people deciding to allocate to s&p trackers have no idea about rules-based vs committee-based governance. They just pick the default

      A lot of retail goes into S&P lookalikes. And at the end of the day, they've consistently picked one over the other.

      > that default can quickly change if the S&P starts making weird/unpopular decisions in a highly publicized situation

      Unlikely. Nobody has dropped NASDAQ 100-tracking funds. If anything, these guys will see long-term net inflows due to this move. S&P probably would have if they’d changed rules—this was an econometric, not business, decision.