Isn’t one of the concerns that index funds are supposed to mimic the index’s returns, but absolutely aren’t required to track the index holdings? If absolute r

Isn’t one of the concerns that index funds are supposed to mimic the index’s returns, but absolutely aren’t required to track the index holdings? If absolute rebalancing was required in an S&P 500 index fund, there would not be enough liquidity in the market for some of the smaller of the 500. It’s all been fine and well during a bull market, but a concern is that “index” funds have huge amounts of synthetic holdings that are untested in a rout.