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The problem isn’t that you’re invested in the index. The problem is that the index decided it wanted to change its rules to include companies that are not profi
by darth_avocado 4mo ago
The problem isn’t that you’re invested in the index. The problem is that the index decided it wanted to change its rules to include companies that are not profitable. I still remember the days when you needed to be profitable for x quarters and have a minimum amount of float to be listed in an index. That changed overnight and we all know why.
- kyleee 4mo agoCan someone make an etf that uses the older more conservative criteria for inclusion?
- awesome_dude 4mo agoCan they? Yes, anyone can. Will they... that's a different question
- kevin_nisbet 4mo agoAnd even if there are new ETFs like this, will ETF customers bother to move at enough scale. It's like the old quote for buying IBM, no one get's fired for returning the benchmark, so if it's the benchmark adjusting the way they do things there is lots of inertia.
- skue 4mo agoNo need. There are already plenty of them that track the S&P — which notably decided NOT to change its rules. Feel like many of these articles were either prewritten, lazy, or have intentionally omitted the non-impact that S&P opting to not change its rules has had, just so the headline and lede could be as sensational as possible.
- akg_67 4mo agoIndex licensing might be an issue.
- electriclove 4mo agoS&P 500 did not change its rules right?
- 1over137 4mo agoRight.
- w29UiIm2Xz 4mo agoA simpler solution to this would be to introduce new ETF tickers for changed rules. It's a breaking change -- version it.