> 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.

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maest 2 hours ago | parent | next [-]

> 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 an hour ago \| parent [-]
		> 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.

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mandevil 2 hours ago | parent | prev [-]

Just a FYI, S&P rolled back the dual-class rule. It was in place from 2017 to 2023.