logoalt Hacker News

JumpCrisscrosstoday at 4:55 AM2 repliesview on HN

> 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.


Replies

maesttoday at 5:42 AM

> 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.

show 1 reply
mandeviltoday at 6:28 AM

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