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0 pointslotsofpulp11d ago0 comments

>Unless you think that I can make up whatever arbitrary list of stocks I feel like, and call it an index, and create an ETF that tracks it, and still call that an index fund.

Yes, you can. Whether or not the index makes sense for whatever one's investing goals may be is irrelevant.

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bagacrap10d ago

Then what does "index" even mean? Is Cathy Woods an index?

lotsofpulpOP10d ago

In this context, I would take any list of rules that dictates buying securities to be an index.

For example, a fund buys an equal number of shares of every publicly listed company.

Or a fund buys securities that trade with a ticker symbol starting with the letter C.

Based on that definition, one could refer to a Cathie Wood index fund to be composed of whatever she decides to buy and a bagacrap index fund to be composed of whatever bagacrap chooses to buy.

bagacrap9d ago

And if you went with that maximalist definition of an index, then the word would have no useful meaning. If the inclusion criteria is completely arbitrary and capricious (i.e. whatever cathie woods decides she likes that week), then it's still a fund, it's just not an index fund.

QQQ is both arbitrary (the stock exchange has nothing to do with business operations) and capricious (they are changing the rules on a whim to serve Elon's interests, and because the arbitrary inclusion criteria somewhat forces them to).

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