[stocknoob]

Index funds are market cap weighted. As companies fail, as they always do (median lifespan of S&P companies is about 15 years), you have less of it.

[0xDEAFBEAD]

Buy high, sell low in other words?

[jasongi]

Well... in normal times they would be entering at the bottom of the index due to the company beginning to grow, the purchase of which is being funded by a firm exiting the index due to shrinking, so assuming you have bought and held units in the fund, most of the time an index fund is buying low and selling low.

And then when you sell your units, hopefully in aggregate the index is worth more than it was when you entered...

[BoneShard]

"That's the point: just pump the shit and offload it to retail. Yeah, it's less than 1% of the S&P 500, so who would even notice?"