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Comment by anonu

Yes there's an index committee comprised of humans. But the index methodology is public and when there are tie break decisions needed, they're fairly predictable.

Another thing to think about is that most of the outperformance of the index is driven by the largest companies. But not because they were added when they were their current size. But because of the buy and hold approach of getting them in when they're still on the small end of the large caps. There was a good recent paper on this concept, showcasing that most of the big index returns are attributable to only a few stocks. Similar to how most of global market returns are mostly just US.

parent anonu 3 years ago

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