指数基金不再安全？SpaceX IPO如何改写被动投资规则

Original Title: Everything You've Been Told About Index Funds Is No Longer True: Phil Bak

Original Author: Quoth the Raven

Original Compiled by: Peggy

Let's talk about what's happening in the capital markets, especially what's happening with index funds. But before that, we need to understand what a "fall from grace" really looks like. To do that, we first need to talk about Pete Rose.

Pete Rose wasn't just a baseball star; he was the very image of a "baseball star" in the minds of most fans. Covered in dirt, giving his all, tough, gritty. Later, he became a player-manager, the face of a franchise, and a representative figure for the sport itself.

But along the way, he made some mistakes. As it turned out, he made the biggest mistake of that era: betting on his own sport. Looking at it today, it's ironic, because sports betting is now on everyone's phone, advertised relentlessly during every sporting event. But back then, people still cared about old-fashioned concepts like "integrity." So the league decided to make an example of Pete Rose.

15 years later, a broken Pete Rose, needing to pay his bills, had to lend his remaining fame to WrestleMania. Soon, he found himself in the ring, facing a 400-pound Samoan wrestler named Rikishi.

I must offer a word of caution here: watch it carefully. Because Rikishi has a signature move called the stinkface. It's as "classy" as it sounds: Rikishi traps his opponent sitting in the corner of the ring, turns his back, and grinds his massive rear end into the opponent's face, while the crowd goes wild.

You can watch it yourself. It's as bad as it sounds.

As Rikishi rubbed his massive butt on Pete Rose's face, if you look closely, you see something not often seen: a certain look in Pete's eyes. It's a mixture of sadness and acceptance. It's the look of a man realizing how far he has fallen. His eyes aren't fighting against the injustice of his current situation; they are dazed, weary, and accepting of this new, sad reality.

John Bogle is no longer with us. I can only imagine the look on his face if he saw what is happening to index funds today. I can only imagine it would be the same sad look. The same dazed, weary acceptance: his great invention, once standing so high, is now falling into a sewer of fraud.

If you've been reading my articles for a long time, especially when I wrote more about stocks and ETFs, you can probably guess what I'm going to say. But if you're a new reader, let me catch you up on the background. Here's how it all actually played out:

Low-cost investing was once a powerful narrative that pitted ordinary investors against greedy Wall Street;

This narrative drove capital flows into passive index funds;

These capital flows boosted performance, allowing the market-cap-weighting factor—essentially a combination of an anti-small-cap factor and a momentum factor—to outperform all other factors;

Outperformance brought in more capital, closing the loop;

Options volume surpassed spot stock volume, and derivatives linked to the largest indices began driving prices more than the index funds themselves;

Thus, valuation ceased to matter to the market.

All of this has brought us to today, and to the Rikishi moment we are facing. That moment is the SpaceX IPO.

First, Nasdaq modified the rules for the Nasdaq-100 index to make it easier and faster for newly listed, ultra-large-cap companies like SpaceX to enter the index. These rule changes seem to weaken the traditional standards of free float, liquidity, investability, and replicability for indices. Time will tell if this is good or bad for investors. But one thing is certain: it greatly benefits Nasdaq in its bid for SpaceX to choose it as its primary listing venue.

Of course, you could say that allocating stocks based on their primary listing exchange is madness. You would be right to say so. I've been to those pitches. The reasons a company chooses to list on the NYSE versus Nasdaq have *nothing* to do with the relative investment merits of the S&P or QQQ. We are talking about two completely disconnected worlds.

For example, people think they are buying tech stocks when they buy the Nasdaq-100, yet it includes Costco, Walmart, and a bunch of other things. They might also think they can get Oracle or Uber, but they can't, because those companies chose to list on the NYSE for reasons completely unrelated to your portfolio. So you miss out on them.

This is insane.

But it's always been this way. And now it's worse. Because this time, it's not just about the listing venue. All index providers have modified their index methodologies just to cram companies like SpaceX, Anthropic, and OpenAI into their indices. If valuation still mattered, the valuations at which index fund investors will be forced to buy these companies would make you sick.

According to Hedgeye, the damage is as follows:

Rule changes surrounding the SpaceX IPO:

Index providers waived profitability requirements and shortened the post-listing observation window from 90 days to 5 days.

This will force over $30 trillion in passive 401(k) and retirement funds to buy SpaceX at its IPO valuation.

Bloomberg Intelligence estimates that S&P 500 funds must absorb 19% of SpaceX's float within 6 months.

Russell 1000 and Nasdaq-100 funds will absorb 24%.

The rules originally designed to protect passive investors:

Since 2002, the S&P 500 has required a company to have 12 months of trading history and four consecutive quarters of GAAP profitability. Both requirements have now been waived.

Nasdaq shortened its inclusion window from 90 trading days to 15.

FTSE Russell shortened it to 5 trading days.

All three benchmark indices are now designed to buy SpaceX at its IPO pricing level.

This is the moment. The "jump the shark" moment for index funds. This is the moment when the great Pete Rose stares into the giant butt of Rikishi, with that look of despair in his eyes.

Investors are no longer just outsourcing stock selection. They have also outsourced asset allocation, IPO discipline, liquidity judgment, valuation discipline, listing venue selection, and prudence. They have outsourced all initiative in their own trading to index committees, which sway with the wind.

Indices are no longer neutral. They are making active bets, and they are betting on the frothiest companies, at the highest valuations.

Active management has never had such a great entry point. Direct indexing has never been more important. A massive shift is finally approaching.

Everything you've been told about "smart-but-boring" index funds is no longer true.

Get out while you still can. Choose your own methodology, choose your own factors, choose your own stocks, and retake control of your own portfolio.

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