[JumpCrisscross]

> no clue how trillions of $ from their pension funds

Pension funds don't tend to follow the S&P 500, much less automatically. They're sophisticated institutional investors like CalPERS [1] who dabble in everything from public stocks to private equity.

It's other retirement assets, e.g. 401(k)s and IRAs, that tend to follow the S&P 500. But again, with substantial variation.

S&P including these companies would have driven a lot of money towards them. But there was a lot of misinformation around the magnitude of that drive, as well as the breadth of whom it would affect.

[1] https://en.wikipedia.org/wiki/CalPERS

[viceconsole]

In the US at least, many pension funds are not sophisticated, they're small, underfunded, and getting taken for a ride by expensive advisors who promise fantastical returns that will help dig them out of their funding ratio hole. Many would be better off using an S&P 500 index fund for their equity component instead of getting wined and dined into an illiquid, opaque private equity investment.

Telling that among OECD countries, the US is an outlier in having a much lower average funding ratio, and this despite the fantastic performance of the US stock market over the last 15 years.

[JumpCrisscross]

> many pension funds are not sophisticated, they're small, underfunded, and getting taken for a ride by expensive advisors

Who tend to come up with bumfuck benchmarks other than the common ones. Sometimes for good reasons. Often to justify their own comp.

> Many would be better off using an S&P 500 index fund

Maybe. They would probably be better off with some total-market funds (instead of biasing towards large caps, especially if they're small). But my point stands: pension funds don't tend to automatically follow any major index, much less the S&P 500 proper.

[kgwgk]

It’s true that S&P 500 is not the most popular US equities benchmark for pension funds. Russell is the preferred provider - and they will include SpaceX 5 days after the IPO.

[JumpCrisscross]

> S&P 500 is not the most popular US equities benchmark for pension funds. Russell is the preferred provider

Where are you getting this from? Basically zero pension funds automatically track any single index. (There seems to be a misconception equating pension funds with retirement funds in general. Pension funds are, on the whole, remarkably sophisticated investors. Many pensions funds were private shareholders of these companies already.)

> Russell is the preferred provider - and they will include SpaceX 5 days after the IPO

Russell has loads of indices. Their total market index will quickly incorporate SpaceX. Same with S&P. There are also IPO indices that will incorporate it on day one, because that's what they're designed to represent.

[kgwgk]

>> S&P 500 is not the most popular US equities benchmark for pension funds. Russell is the preferred provider

> Where are you getting this from?

At least it seems correct for a subset that may or may not be representative: “This report intends to provide insights into the overall and asset class benchmarks selected by the 50 largest U.S. public defined benefit plans. [.. ] the Russell 3000 index was most frequently cited to measure U.S. equity performance.”

https://www.nasra.org/Files/Topical%20Reports/Investment/P&I...

[frikskit]

You’re right but this chain of reasoning is irrelevant/missing the important point.

You don’t need to track index X to be affected by changes in X. You only need to hold something related to X. Almost all pension funds, heck almost every investment account in the world holds something affected by some index.