[stuxnet79]

> Why do index funds follow the exact companies in the index itself?

The fund itself is a financial product with a fee attached. Regardless of an index's perceived "quality" funds will always be created as long as there is investor demand. In recent years there has been an explosion of exotic "thematic" ETFs with exaggerated returns & comparatively higher fees. These tend not to attract the most sophisticated crowd. You can be sure they won't perform well into the long term.

> Is it simply a branding thing? I’m buying into S&P500 because S&P500 is a highly recognized term used to mean “The US Economy”?

Absolutely, it is 100% branding. For better or for worse S&P500 is the barometer of US economic health. There's every incentive to manipulate it to score political points.