I think this is poor advice. Its share of the index will be relatively small and if it is indeed a dud, the index will organically rebalance. If you’re a long-term investor, this would just be a temporary blip. On the other hand, if this is thr opposite of a dud, you’ll get the benefit of that.
Sure, it'll only be ~2% of the index if it opens where they want to. But in the downside case where it meanders long enough for significant amounts of its stock to make it in to public hands and then goes to 10x revenue (i.e. down 90%) , you've allowed a company to engineer dramatic changes in index rules resulting in a transfer ~1% of S&P 500 market cap from index funder holders to its bagholders^W privileged insiders^W^W investors.
Yes a -1% day should be nothing to a long term holder. Yes they're buying the market; if the market is wrong they shouldn't really have any recourse. But one can also understand that a -1% day that accrues ~entirely to the benefit a small group, who appear to have engineered that outcome has much more emotional valence than a typical down down. It doesn't feel like a bad day on the market, it feels like a heist.
> I think this is poor advice. Its share of the index will be relatively small and if it is indeed a dud, the index will organically rebalance.
If a 1 to $1.5t IPO that was fast tracked onto the S&P500 and then hoovered up a bunch of index fund money becomes a dud, the organic rebalance is going to start with a full reassessment of if index funds and the S&P can be TRUSTED.
Its very possible it will be more than a blip, although to be fair if it isn't it's going to be the sort thing you aren't going to dodge.
Oil/Gas/Petroleum is essential for our economy to function, and the line between "ethical" and "not ethical" is a dial (one among many that all need to be tuned together), not a switch.
$PTL/Inspire does not adjudicate "dial" ethical issues, just switches -- company practices/policies that it views as black-and-white good/bad. "It would be ethical if you produced N% less" doesn't fit that category.
If one wants to gamble on the grift, that is what options are for. Otherwise, we might as well start adding NFTs to the indexes if fundamentals do not matter. Luck for some, risk management for others. Regardless, informed consent is important imho. Relevant precedence is ETFs that exclude Big Tech.
https://www.defianceetfs.com/xmag/ ("XMAG, the first ETF designed to provide investors with exposure to the S&P 500, excluding the “Magnificent 7” (Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla). XMAG offers a unique opportunity for investors to access the broader market while reducing concentration risk in these dominant tech stocks.")
In 2025 VOO returned 17.82% vs VOOG returned 22.11%. XMAG’s trailing 1-year return through late 2025 was around 9–15% depending on the measurement date, as the Mag 7 dragged badly in early 2025.
VOOG has returned 18.28%/yr over 10 years vs 15.63%/yr for VOO, a meaningful gap driven almost entirely by Mag 7 dominance. XMAG has no 10-year track record.
Certainly, you have done well over the last ~18-24 months if you have exposure to the AI investment exuberance (VOO), just as you did well if you had exposure to certain securities during ZIRP or the pandemic. "Past performance is no guarantee of future results."
Which you only know in hindsight, in the context of this performance benchmark. In that time frame, we had zero interest rate policy, a global pandemic, and now an AI bubble. "Will the conditions or events that led to my historical returns continue?" is a material component of forward looking exposure decisioning when investing.
> Luck for some, risk management for others. Regardless, informed consent is important imho. Relevant precedence is ETFs that exclude Big Tech.
Yup. Coupling this change with "oh, and btw, we also want the option to be able to only put out annual or biannual earnings reports not quarterly" means "We want to offload even more risk."
There are many dubious companies in the S&P500. I don’t see the point in getting selectively heated about this one when everyone seems to be okay with the others.
That’s the way indexes roll. I don’t invest in indexes for this reason.
There is a separate structural issue with indexes that is being ignored here. Indexes were never really designed to accommodate companies going public so late with high revenue growth. A couple decades ago companies went public when they were so small that they could grow into the index. This reflects changes in the nature and structure of the capital markets, these new IPOs are just a manifestation of this reality.
Also given how the S&P weights, it'll have about as much sway as DoorDash.
Annoying they pushed it into the indexes, but like you said, we've also never had a company come out in the 1T range or even the x00B range. These indexes are supposed to represent the market and can't ignore a 1T market cap company for very long.
EDIT
One other thing to add, is that we still do not know what the stock will price at. It's already come down once, and as more information comes out it can continue to come down until it's finally priced the day before the first trading day.