That would certainly be a way to control escalating concentration but at the expense of keeping index fund costs low. The Vanguard Total Stock Index (VTI) has a

That would certainly be a way to control escalating concentration but at the expense of keeping index fund costs low. The Vanguard Total Stock Index (VTI) has an expense ratio of 0.03 - almost zero. Low expenses is a critical factor behind why index funds outperform active investing. So, yes, your proposal would work, but the expense ratio would up to implement the cap.