Big relief for me. As a passive investor, I want the indices to follow the same passive strategy they always have, and specifically not make exceptions for specific companies like SpaceX wanted.
Plenty of ways to get exposure to that stock without it going into the indices it is not qualified for.
The only substantial effect I've seen of the influencers who were doomsplaining this decision was some minor churn in retirement assets from low-cost S&P 500 followers to higher-cost funds. (The market, broadly, never priced in a rebalancing of the S&P 500. So this was almost entirely whipped up by influencers.)
Broadly speaking, if you were actually considering trading on the back of S&P's decision, or worse, if you actually did, consider trimming who you follow for financial advice.
The market may not have ever priced in a rebalancing of the S&P 500, but the S&P 500 also has never allowed entry of companies that may never become profitable.
> the S&P 500 also has never allowed entry of companies that may never become profitable
Yup. Which is why it was always a long shot. I personally thought they'd adopt some of the seasoning rules, but they were more conservative than even that.
> if you had seen it what would have that pricing looked like?
Look up rebalancing trades, or, less graciously, rebalancing front running. If the index is going to rebalance to include a new entrant, you'll see the other components trade down in anticipation. It's a very tight signal, and it wasn't present to any measurable degree for the S&P 500.
> What does “other components trade down in anticipation” mean when SPCX doesn’t even exist?
Let's model an equal-weighted index with nine components, with each thus representing 1/9th of the index's allocation.
You learn that a tenth member is going to be added. You don't know who it is. But you know that each of those nine will, after that member is included, represent 1/10th of the index's allocation versus the 1/9th they did before. You know a precise bucket of trades everyone following the index is going to mechanically enter into. Which means it behooves you to be on the other side of it.
When rebalancing–or new inclusion–occurs, you see this pre-trading. Similar to merger arb. But much more clear as a signal because you see it in precise ratios across the index's members. It's difficult to pick up for small indices. But for something like the S&P 500, you'd expect to see someone selling those shares in anticipation, and, now that the rule isn't going into effect, someone dumping those shares in those ratios.
Why is that relevant? The rules are in place for a reason, why does it matter what the percentage is? They're not profitable. When they prove they're worth the dollars, they can be included, per the rules.
Also, S&P500 has a current market cap of $67 trillion, 0.3% of that is some $200billion. That is essentially a wealth transfer to the rich. They don't need it.
> That is essentially a wealth transfer to the rich. They don't need it.
These are not valid arguments. The companies that get added to the S&P are always owned in some fraction by rich people.
SpaceX is obviously majorly owned by Elon, but it’s also owned by regular employees, a bunch of private investors and other funds that regular people invest in.
> They're not profitable.
Right
> When they prove they're worth the dollars,
Profitable isn’t related to “worth the dollars”. You need to look at income and how much is being reinvested into growth. Amazon famously remained unprofitable due to reinvestment and waiting for them to become profitable before investing was a bad bet.
> SpaceX is obviously majorly owned by Elon, but it’s also owned by regular employees, a bunch of private investors and other funds that regular people invest in.
Is it really owned by them if Elon retains most of the voting rights anyway?
So is spacex growing like Amazon was? There is no evidence of growth. And no, Google renting them infra grom then is not growth. If it waa, AllBirds is the next unicorn
Mostly owned by Elon who has 84% of the voting rights. Completely his entity and it can’t be denied that the value of an interesting space business has been massively inflated by tacking a worthless AI business onto it.
#2 is _much_ closer to #1 than #3 (let alone #4), meaning that had an exemption been made to allow SpaceX in, given the rest of the existing rules, at least the impact to ETF holders would not be outblown. The same could not be said for NASDAQ , which was the main source of all the debate.
Yeah, the thing that really concerns me about the other indices is the minimum free float in calculations, so not only will SpaceX appear in the index way too early, they'll be artificially giving it a massive boost, meaning that passive fund investors are forced to buy even more. That is the most egregious part of all.
I can partly see the rationale - existing stockholders will want to ditch their stock ASAP to cash in on the artificially elevated prices, and so there's a good chance the free float will increase quicker than the index can capture it, but this rule change will be driving those sales. It's all a scam.
I'm glad a good chunk of my US holdings are in S&P tracked ETFs because they won't include SpaceX until it's ready, but another 25% of my funds are in funds tracking FTSE global indices (so equivalent to about another 15% in US), and I haven't yet found a good alternative to those. I might end up having to switch to separate UK, S&P 500 and global ex-US, but making that switch would probably cost me as much as just sucking it up and being forced to buy SpaceX.
I’ve moved my S&P 500 investments to the Equal Weight index to reduce my exposure to AI. Quite aside from SpaceX, I think the large-cap tech companies are making some uncomfortably large bets on AI and any major upset could cause a domino effect.
But as so many ETFs have a significant stake in large-cap US tech stocks (the top 10 holdings of the iShares MSCI World ETF is entirely comprised US Big Tech, making up 20% of the value of the ETF), I found S&P 500 Equal Weight to be pretty attractive.
As for SpaceX itself? I feel the numbers involved all sound a bit unbelievable to me. I fear that there will be a rug-pull sometime post-IPO, and retail investors (and taxpayers, if the US Government ends up taking a stake, as they have recently indicated they might do for OpenAI) will inevitably be left holding the bag.
> I was planning to move to an equal weight index but this gives me a little more time to evaluate options.
S&P requires 4 consecutive profitable quarters, amongst other requirements, so if one of the new mega caps like SpaceX or Anthropic or OpenAI get included, you’d probably want to get the benefit of their performance.
Put differently, if one previously specifically picked an index fund that is not equal weighted, why would you change from that strategy?
But they haven't been good performers, and don't deserve joining s&p, and that is the point, do not make exceptions just because Elon Musk or whatever delusional billionaire says so.
I suspect this is due to fatigue. I admit I often post low quality replies under AI slop posts, simply because flagging them does nothing when they are somehow upvoted above and beyond anything human made.
This fatigue also causes a lot of readers to skip the AI threads, meaning less self-moderation of the forum through voting.
The top level comments are not smart or well conveyed, they are just the other side of the internet echo chamber. “Good, the rich don’t need money”, etc.
I think Elon owned companies are just a third rail for any kind of intelligent discussion because it turns into Elon fan boys arguing against Elon haters.
This is very smart of these folks because for just three companies, they can't ruin the trust and impeccable reputation they have built over the years.
This decision alone is worth several trillion dollars.
Well, it might be a good decision but I think the possibility of Standard and Poor one day being worth trillions of dollars more than if they had included three companies a year or two earlier than when they inevitably join the index is absolutely zero.
I wonder if profitable means that investment must be recouped or just if your operational expenses must be compensated by your earnings.
Anthropic is becoming "profitable" while burning a series H of 69 bns usd. Does it count as profitable?
I'm curious if someone well versed in finance can answer, because from my uneducated perspective, it's not profitable to burn billions in order to make a billion.
A lot of comments here are saying that the impact on the S&P would have been 'minimal' since the S&P is float weighted. So SpaceX would have been ~0.3% of the index.
The point isn't that the impact would have been minimal. It's that changing the rules to suit the rich and connected is the literal definition of crony capitalism. Why should SpaceX get exemptions from entry requirements to the S&P when every other company before it didn't?
Trying to justify it based on an argument that it would have been 'just' $200 billion, is absurd since that $200 billion is coming largely from the public via index funds that would have been forced to buy SpaceX shares.
> It's that changing the rules to suit the rich and connected is the literal definition of crony capitalism. Why should SpaceX get exemptions from entry requirements to the S&P when every other company before it didn't?
The S&P grandfathers in loads of shit. Google and Berkshire got to be the only special babies with multiple classes of stock for a few years.
The S&P tries to represent large cap American stocks. There was a genuine debate around whether SpaceX et al represent large cap stocks. Elon et al tried to put their thumbs on the scale, of course, but that wasn't the driving concern, this has been a debate that has been happening for a while.
The weird thing is linking it to Elon is absolutely titillating. So that's what influencers did. It's a maddening story. But it really isn't true, and it was even less true when the S&P rule changes were being misrepresented as faits accomplis.
Good. Financial grift needs to end. Passive investment has become slightly too passive. S&P saved us. We weren't so lucky when they were rating bonds before the GFC. Glad they seem to have grown some ethics and are not bending the knee to the rocketman.
> Major W. Regular people were going to get robbed blind
Not really. One, it was unlikely to happen. The market not pricing in any rebalancing communicated that. Two, the magnitude–even for the S&P 500–would have been small. About a third of stocks are in passive strategies, about 15% in any index, and while most of that is the S&P 500, the index market is incredibly competitive.
S&P made the right move. But the tragedy this episode has revealed, at least to me, is in how venal and influential this new breed of financial influencers on YouTube and X are, and the degree to which they're willing to misinform to get clicks.
What was unlikely to happen? It already happened in Nasdaq. It’s nice that it didn’t for S&P but for most investors it already did happen, so I’m not sure the ‘whatever’ attitude is warranted.
Also, since when is it appropriate/intellectually OK to respond to allegations of corruption by saying ‘stop freaking out, it’s only a small amount of corruption PER PERSON’.
NASDAQ 100 is marketed as a tech-focussed fund. It's also way smaller. And it makes sense for it to include new issues. Total-market funds are also being adapted to include these, and again, that makes sense.
> for most investors it already did happen
What do you mean? For the vast, vast majority of investors, nothing happened. If S&P had adoped these rules, the majority of investors would still be unaffected.
> when is it appropriate/intellectually OK to respond to allegations of corruption by saying ‘stop freaking out, it’s only a small amount of corruption PER PERSON’
I'm saying the allegations of corruption were misplaced. The rule changes have been mooted for years. Did Musk et al try to put their thumbs on the scale? Sure. That should be called out.
But the scaremongering that followed was full of factual misrepresentations. Moreover, it presumed corruption across the board versus certain actors trying to corrupt a process, all for the purpose of getting views.
Kudos to S&P 500. Vast majority of the world has no clue how trillions of $ from their pension funds is being funneled to the select few. Absolutely pathetic.
> no clue how trillions of $ from their pension funds
Pension funds don't tend to follow the S&P 500, much less automatically. They're sophisticated institutional investors like CalPERS [1] who dabble in everything from public stocks to private equity.
It's other retirement assets, e.g. 401(k)s and IRAs, that tend to follow the S&P 500. But again, with substantial variation.
S&P including these companies would have driven a lot of money towards them. But there was a lot of misinformation around the magnitude of that drive, as well as the breadth of whom it would affect.
In the US at least, many pension funds are not sophisticated, they're small, underfunded, and getting taken for a ride by expensive advisors who promise fantastical returns that will help dig them out of their funding ratio hole. Many would be better off using an S&P 500 index fund for their equity component instead of getting wined and dined into an illiquid, opaque private equity investment.
Telling that among OECD countries, the US is an outlier in having a much lower average funding ratio, and this despite the fantastic performance of the US stock market over the last 15 years.
> many pension funds are not sophisticated, they're small, underfunded, and getting taken for a ride by expensive advisors
Who tend to come up with bumfuck benchmarks other than the common ones. Sometimes for good reasons. Often to justify their own comp.
> Many would be better off using an S&P 500 index fund
Maybe. They would probably be better off with some total-market funds (instead of biasing towards large caps, especially if they're small). But my point stands: pension funds don't tend to automatically follow any major index, much less the S&P 500 proper.
It’s true that S&P 500 is not the most popular US equities benchmark for pension funds. Russell is the preferred provider - and they will include SpaceX 5 days after the IPO.
Big relief for me. As a passive investor, I want the indices to follow the same passive strategy they always have, and specifically not make exceptions for specific companies like SpaceX wanted.
Plenty of ways to get exposure to that stock without it going into the indices it is not qualified for.
Yep!! Respect to them. I was planning to move to an equal weight index but this gives me a little more time to evaluate options.
> I was planning to move to an equal weight index
The only substantial effect I've seen of the influencers who were doomsplaining this decision was some minor churn in retirement assets from low-cost S&P 500 followers to higher-cost funds. (The market, broadly, never priced in a rebalancing of the S&P 500. So this was almost entirely whipped up by influencers.)
Broadly speaking, if you were actually considering trading on the back of S&P's decision, or worse, if you actually did, consider trimming who you follow for financial advice.
The market may not have ever priced in a rebalancing of the S&P 500, but the S&P 500 also has never allowed entry of companies that may never become profitable.
> the S&P 500 also has never allowed entry of companies that may never become profitable
Yup. Which is why it was always a long shot. I personally thought they'd adopt some of the seasoning rules, but they were more conservative than even that.
> The market, broadly, never priced in a rebalancing of the S&P 500
And if you had seen it what would have that pricing looked like?
> if you had seen it what would have that pricing looked like?
Look up rebalancing trades, or, less graciously, rebalancing front running. If the index is going to rebalance to include a new entrant, you'll see the other components trade down in anticipation. It's a very tight signal, and it wasn't present to any measurable degree for the S&P 500.
Again, what would it have looked like? What does “other components trade down in anticipation” mean when SPCX doesn’t even exist?
> What does “other components trade down in anticipation” mean when SPCX doesn’t even exist?
Let's model an equal-weighted index with nine components, with each thus representing 1/9th of the index's allocation.
You learn that a tenth member is going to be added. You don't know who it is. But you know that each of those nine will, after that member is included, represent 1/10th of the index's allocation versus the 1/9th they did before. You know a precise bucket of trades everyone following the index is going to mechanically enter into. Which means it behooves you to be on the other side of it.
When rebalancing–or new inclusion–occurs, you see this pre-trading. Similar to merger arb. But much more clear as a signal because you see it in precise ratios across the index's members. It's difficult to pick up for small indices. But for something like the S&P 500, you'd expect to see someone selling those shares in anticipation, and, now that the rule isn't going into effect, someone dumping those shares in those ratios.
They weight by free float so it would been something like 0.3%. Hardly the end of the world
"they only be stealing a tiny amount so not worth doing anything"
Why is that relevant? The rules are in place for a reason, why does it matter what the percentage is? They're not profitable. When they prove they're worth the dollars, they can be included, per the rules.
Also, S&P500 has a current market cap of $67 trillion, 0.3% of that is some $200billion. That is essentially a wealth transfer to the rich. They don't need it.
> That is essentially a wealth transfer to the rich. They don't need it.
These are not valid arguments. The companies that get added to the S&P are always owned in some fraction by rich people.
SpaceX is obviously majorly owned by Elon, but it’s also owned by regular employees, a bunch of private investors and other funds that regular people invest in.
> They're not profitable.
Right
> When they prove they're worth the dollars,
Profitable isn’t related to “worth the dollars”. You need to look at income and how much is being reinvested into growth. Amazon famously remained unprofitable due to reinvestment and waiting for them to become profitable before investing was a bad bet.
> SpaceX is obviously majorly owned by Elon, but it’s also owned by regular employees, a bunch of private investors and other funds that regular people invest in.
Is it really owned by them if Elon retains most of the voting rights anyway?
> Is it really owned by them if Elon retains most of the voting rights anyway?
Owned by various folks. Controlled by Elon. Granted, I don't know how Texas law deals with minority rights.
So is spacex growing like Amazon was? There is no evidence of growth. And no, Google renting them infra grom then is not growth. If it waa, AllBirds is the next unicorn
Mostly owned by Elon who has 84% of the voting rights. Completely his entity and it can’t be denied that the value of an interesting space business has been massively inflated by tacking a worthless AI business onto it.
> why does it matter what the percentage is
This percentage directly determines the influence on SP500 index funds holders (SPY, VOO, etc.).
The outcome could have been:
1. not included (0%)
2. included, weight by free float (0.3%) --- 54th in the list between $AXP and $MCD
3. included, weight by free float x 3 (0.9%) --- 19th in the list between $ORCL and $JNJ
4. included, weight by market cap (1.75 trillion / 67 trillion = 2.6%) --- 8th in the list between $AVGO and $META
https://www.slickcharts.com/sp500
#2 is _much_ closer to #1 than #3 (let alone #4), meaning that had an exemption been made to allow SpaceX in, given the rest of the existing rules, at least the impact to ETF holders would not be outblown. The same could not be said for NASDAQ , which was the main source of all the debate.
Yeah, the thing that really concerns me about the other indices is the minimum free float in calculations, so not only will SpaceX appear in the index way too early, they'll be artificially giving it a massive boost, meaning that passive fund investors are forced to buy even more. That is the most egregious part of all.
I can partly see the rationale - existing stockholders will want to ditch their stock ASAP to cash in on the artificially elevated prices, and so there's a good chance the free float will increase quicker than the index can capture it, but this rule change will be driving those sales. It's all a scam.
I'm glad a good chunk of my US holdings are in S&P tracked ETFs because they won't include SpaceX until it's ready, but another 25% of my funds are in funds tracking FTSE global indices (so equivalent to about another 15% in US), and I haven't yet found a good alternative to those. I might end up having to switch to separate UK, S&P 500 and global ex-US, but making that switch would probably cost me as much as just sucking it up and being forced to buy SpaceX.
I’ve moved my S&P 500 investments to the Equal Weight index to reduce my exposure to AI. Quite aside from SpaceX, I think the large-cap tech companies are making some uncomfortably large bets on AI and any major upset could cause a domino effect.
But as so many ETFs have a significant stake in large-cap US tech stocks (the top 10 holdings of the iShares MSCI World ETF is entirely comprised US Big Tech, making up 20% of the value of the ETF), I found S&P 500 Equal Weight to be pretty attractive.
As for SpaceX itself? I feel the numbers involved all sound a bit unbelievable to me. I fear that there will be a rug-pull sometime post-IPO, and retail investors (and taxpayers, if the US Government ends up taking a stake, as they have recently indicated they might do for OpenAI) will inevitably be left holding the bag.
> I was planning to move to an equal weight index but this gives me a little more time to evaluate options.
S&P requires 4 consecutive profitable quarters, amongst other requirements, so if one of the new mega caps like SpaceX or Anthropic or OpenAI get included, you’d probably want to get the benefit of their performance.
Put differently, if one previously specifically picked an index fund that is not equal weighted, why would you change from that strategy?
But they haven't been good performers, and don't deserve joining s&p, and that is the point, do not make exceptions just because Elon Musk or whatever delusional billionaire says so.
Its a sensible move. The spaceX IPO is a mess, and if it doesn't go full enron I'm not sure what will happen to the wider market.
Stocks and money. It's so boring.
I will go drive my old German car now, and get a bit drunk in a bottle of Nebbiolo while listening to some French lunatic with a piano.
Enjoy your trip to Mars and your self driving toy cars. The world is off its rails. Bit time.
Sir this is a message board run by an US-American venture capitalist organisation; frankly what do you expect
I expect the balancers to judge and some car batteries mysteriously catching fire as a counterweight.
What's your SKILLS.md? Is your flow multi-agentic?
`--dangerously-skip-hype`
just be sure do it in that order and not the other way around
Dude, are you me? :D
Crazy to see the Twitter behavior here of really smart, well conveyed top level comments replied to by weird propaganda pushing bottom feeders.
HN discussion quality has deteriorated dramatically, especially for anything AI related.
I suspect this is due to fatigue. I admit I often post low quality replies under AI slop posts, simply because flagging them does nothing when they are somehow upvoted above and beyond anything human made.
This fatigue also causes a lot of readers to skip the AI threads, meaning less self-moderation of the forum through voting.
The top level comments are not smart or well conveyed, they are just the other side of the internet echo chamber. “Good, the rich don’t need money”, etc.
I think Elon owned companies are just a third rail for any kind of intelligent discussion because it turns into Elon fan boys arguing against Elon haters.
This is very smart of these folks because for just three companies, they can't ruin the trust and impeccable reputation they have built over the years.
This decision alone is worth several trillion dollars.
Well, it might be a good decision but I think the possibility of Standard and Poor one day being worth trillions of dollars more than if they had included three companies a year or two earlier than when they inevitably join the index is absolutely zero.
I wonder if profitable means that investment must be recouped or just if your operational expenses must be compensated by your earnings.
Anthropic is becoming "profitable" while burning a series H of 69 bns usd. Does it count as profitable?
I'm curious if someone well versed in finance can answer, because from my uneducated perspective, it's not profitable to burn billions in order to make a billion.
https://www.cnbc.com/2026/05/20/anthropic-revenue-explosive-...
> wonder if profitable means that investment must be recouped or just if your operational expenses must be compensated by your earnings
S&P requires profitability (i.e. net income) according to GAAP. That definition incorporates both ROA and operating income.
EBITDA is typically used to evaluate profitability.
> EBITDA is typically used to evaluate profitability
S&P requires GAAP profits, i.e. net income. EBITDA is above that.
Finally some adults in the room.
Related discussion here: https://news.ycombinator.com/item?id=48405718
Nice to see others are thinking the same, as I just posted the same article as a dupe of this one.
A lot of comments here are saying that the impact on the S&P would have been 'minimal' since the S&P is float weighted. So SpaceX would have been ~0.3% of the index.
The point isn't that the impact would have been minimal. It's that changing the rules to suit the rich and connected is the literal definition of crony capitalism. Why should SpaceX get exemptions from entry requirements to the S&P when every other company before it didn't?
Trying to justify it based on an argument that it would have been 'just' $200 billion, is absurd since that $200 billion is coming largely from the public via index funds that would have been forced to buy SpaceX shares.
> It's that changing the rules to suit the rich and connected is the literal definition of crony capitalism. Why should SpaceX get exemptions from entry requirements to the S&P when every other company before it didn't?
The S&P grandfathers in loads of shit. Google and Berkshire got to be the only special babies with multiple classes of stock for a few years.
The S&P tries to represent large cap American stocks. There was a genuine debate around whether SpaceX et al represent large cap stocks. Elon et al tried to put their thumbs on the scale, of course, but that wasn't the driving concern, this has been a debate that has been happening for a while.
The weird thing is linking it to Elon is absolutely titillating. So that's what influencers did. It's a maddening story. But it really isn't true, and it was even less true when the S&P rule changes were being misrepresented as faits accomplis.
> Why should SpaceX get exemptions from entry requirements to the S&P when every other company before it didn't?
I could give you a lot of non-stocks related examples of why rules should not be set in stone.
It's a risky investment, yes there's a chance it could go to the moon, but it could also plummet to earth.
Good. Financial grift needs to end. Passive investment has become slightly too passive. S&P saved us. We weren't so lucky when they were rating bonds before the GFC. Glad they seem to have grown some ethics and are not bending the knee to the rocketman.
Duplicate: https://news.ycombinator.com/item?id=48405718
Major W. Regular people were going to get robbed blind.
> Major W. Regular people were going to get robbed blind
Not really. One, it was unlikely to happen. The market not pricing in any rebalancing communicated that. Two, the magnitude–even for the S&P 500–would have been small. About a third of stocks are in passive strategies, about 15% in any index, and while most of that is the S&P 500, the index market is incredibly competitive.
S&P made the right move. But the tragedy this episode has revealed, at least to me, is in how venal and influential this new breed of financial influencers on YouTube and X are, and the degree to which they're willing to misinform to get clicks.
What was unlikely to happen? It already happened in Nasdaq. It’s nice that it didn’t for S&P but for most investors it already did happen, so I’m not sure the ‘whatever’ attitude is warranted.
Also, since when is it appropriate/intellectually OK to respond to allegations of corruption by saying ‘stop freaking out, it’s only a small amount of corruption PER PERSON’.
> What was unlikely to happen?
S&P adopting the rule changes.
> It already happened in Nasdaq
NASDAQ 100 is marketed as a tech-focussed fund. It's also way smaller. And it makes sense for it to include new issues. Total-market funds are also being adapted to include these, and again, that makes sense.
> for most investors it already did happen
What do you mean? For the vast, vast majority of investors, nothing happened. If S&P had adoped these rules, the majority of investors would still be unaffected.
> when is it appropriate/intellectually OK to respond to allegations of corruption by saying ‘stop freaking out, it’s only a small amount of corruption PER PERSON’
I'm saying the allegations of corruption were misplaced. The rule changes have been mooted for years. Did Musk et al try to put their thumbs on the scale? Sure. That should be called out.
But the scaremongering that followed was full of factual misrepresentations. Moreover, it presumed corruption across the board versus certain actors trying to corrupt a process, all for the purpose of getting views.
It was unlikely to happen anywhere but the Nasdaq-100, because only Nasdaq has the incentive to do it: https://news.ycombinator.com/item?id=48411713
[dupe] https://news.ycombinator.com/item?id=48405718
doesn't work, similar to https://news.ycombinator.com/item?id=48277485
Kudos to S&P 500. Vast majority of the world has no clue how trillions of $ from their pension funds is being funneled to the select few. Absolutely pathetic.
> no clue how trillions of $ from their pension funds
Pension funds don't tend to follow the S&P 500, much less automatically. They're sophisticated institutional investors like CalPERS [1] who dabble in everything from public stocks to private equity.
It's other retirement assets, e.g. 401(k)s and IRAs, that tend to follow the S&P 500. But again, with substantial variation.
S&P including these companies would have driven a lot of money towards them. But there was a lot of misinformation around the magnitude of that drive, as well as the breadth of whom it would affect.
[1] https://en.wikipedia.org/wiki/CalPERS
In the US at least, many pension funds are not sophisticated, they're small, underfunded, and getting taken for a ride by expensive advisors who promise fantastical returns that will help dig them out of their funding ratio hole. Many would be better off using an S&P 500 index fund for their equity component instead of getting wined and dined into an illiquid, opaque private equity investment.
Telling that among OECD countries, the US is an outlier in having a much lower average funding ratio, and this despite the fantastic performance of the US stock market over the last 15 years.
> many pension funds are not sophisticated, they're small, underfunded, and getting taken for a ride by expensive advisors
Who tend to come up with bumfuck benchmarks other than the common ones. Sometimes for good reasons. Often to justify their own comp.
> Many would be better off using an S&P 500 index fund
Maybe. They would probably be better off with some total-market funds (instead of biasing towards large caps, especially if they're small). But my point stands: pension funds don't tend to automatically follow any major index, much less the S&P 500 proper.
It’s true that S&P 500 is not the most popular US equities benchmark for pension funds. Russell is the preferred provider - and they will include SpaceX 5 days after the IPO.