> If they have discretion...

True. But doing so would be a fair amount (by index standards) of overhead and hassle. Plus they'd get endless complaints any time the S&P500 was outperforming the "S&P 499" that they were using. Plus they'd put themselves in the crosshairs of a whole range of activists who wanted them to switch to an "S&P 498", or ...497, or ... - by excluding various other companies the activists didn't like.

> If they're forced to passively hold...

Their responsibility is managing their pension funds in the interests of their state, and their current & future retirees. Not pious adherence to passive indexing canon. Their calculus here might be to throw a small bone to the anti-Musk activists who are currently bothering them, while acquiring some "we tried!" butt-coverage for whenever Musk really goes off the rails. (And, obviously, trying to discourage other companies from using such control structures.)

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rjmunro 3 hours ago | parent | next [-]

I'd like to be able to invest in an "index minus certain companies which I choose" fund so that people can exclude companies that they don't like for whatever reason.

	▲	RhysU 3 hours ago \| parent [-]
		You can. A bunch of companies offer SMAs like this. It's a retail product, usually labeled as some smart tax loss harvesting atop the indices where you can denylist particular stocks. Fidelity offers one: https://www.fidelity.com/managed-accounts/separately-managed... It'd probably take you an afternoon worth of time to research then enact it.

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RhysU 4 hours ago | parent | prev [-]

> But doing so would be a fair amount (by index standards) of overhead and hassle.

Any product provider, like Blackrock, would jump at the opportunity to sell them an S&P499 given the scale of those pension funds.

> Plus they'd put themselves in the crosshairs of a whole range of activists...

Not to mention putting their own jobs on the line if SpaceX outperformed the rest of the index.

The first point, that an S&P499 is easy for them but they won't do it, means they have no conviction. The second point (where I agree with you), that it's obvious we-tried CYA lacking any real teeth that'll go nowhere, means they have no courage.

They're an asset manager: put your money where your mouth is. If their hypothesis is that SpaceX governance will be bad then short the bloody thing and use the proceeds to buy the S&P499. It's not a complicated trade given their industry position and ability to call third-party providers.