[OscarCunningham]

Nah, because the value of the stock that the index fund already owned would also increase in the same proportion.

[icebraining]

Fair enough, for stocks the index already owned, but what about for the others? If the investor took a stock that wasn't in the top 500 and inflated its value above the 500th stock, wouldn't an S&P 500 index fund then buy it?