A long time ago, 500 was about the largest nice round number that could be calculated in a reasonable amount of time.
No longer. But it has an extremely valuable brand - did you know S&P has hundreds of indexes? Do any others readily come to mind?
It was originally supposed to be “close enough” to the entire market. We don’t need to do that anymore. But they want to, to milk that valuable brand. Profitability is an arbitrary rule for an antiquated index. Let it die.
There are other s&p indexes. You can get total market index of you want. If you go too large you pick up companies that are too small you might as well pick the Russel or similar. The 500 is/was a good balance. Companies big enough to have government influence but not just the bloated top.
No longer. But it has an extremely valuable brand - did you know S&P has hundreds of indexes? Do any others readily come to mind?
It was originally supposed to be “close enough” to the entire market. We don’t need to do that anymore. But they want to, to milk that valuable brand. Profitability is an arbitrary rule for an antiquated index. Let it die.