Trillions The Secretive Committee Behind the S&P 500
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Oct 1, 2020 David Blitzer, former head of the S&P Index Committee from 1995 to 2019, reveals the inner workings of the S&P 500. He discusses the surprising exclusion of Tesla, despite meeting all criteria, and the secretive nature of the committee. The conversation delves into decision-making dynamics, criticisms of passive indexing, and the evolution of index management in the age of ETFs. Blitzer also shares what it takes to join this elusive committee and provides a fascinating glimpse into the balance between public expectations and market realities.
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Microsoft Comparison To Tesla Furore
- David Blitzer compares Tesla's exclusion chatter to the Microsoft saga when insider ownership delayed its S&P entry.
- He says Microsoft drew heavy criticism before eventual inclusion, showing this pattern repeats.
Anonymity Protects Committee Integrity
- The committee stopped releasing member names after firms started sending packages to influence decisions.
- Anonymity helps protect members from lobbying and preserves decision integrity.
How The Committee Reaches Decisions
- The S&P committee typically met in person with six to ten members and resolved disputes by going around the table.
- Most votes were unanimous or near-unanimous, and dissenters could record their objections.