We need a more algorithmic index, not one ruled by one central committee.
Wonder if there's an ETF that simply does market cap weighting and just picks top public companies by valuation.
You said it yourself: they're guidelines. I'm glad there are humans in the loop to exercise judgement when the guidelines may be giving a funny results.
> We need a more algorithmic index, not one ruled by one central committee.
IIRC, there already are many "algorithmic indexes", but they're not the S&P500 and there's no reason for the S&P500 to be one.
What if they exclude a company because of political ties to communist regimes? Or ESG concerns? To me neither of these is acceptable. I would be pretty annoyed if Exxon was excluded from SP500 because they contribute to Global Warming.
Go pick another index is not a defensible position when I'm criticizing the index's policies specifically. Yet to hear good reasons for why a committee "exercising judgement" is a good thing for the average investor.
If you think a more algorithmic approach would be better you could start one — perhaps you could even get into yc with it, though historically the index publishers themselves don’t make a lot of money directly.