The S&P 500 was built to measure market value but now steers it: index funds and benchmarked managers channel flows by index weight, and firms adjust behavior around inclusion. This observer effect widens the gap between 'owning the market' and owning businesses that invest and pay out cash.
— If metrics become masters, policy and investors must rethink how benchmarking shapes capital allocation, corporate strategy, and financialization.
Wessie du Toit
2025.09.16
74% relevant
The article argues Rachel Reeves’s debt‑falling rule and reliance on Office for Budget Responsibility forecasts turn measuring tools into policy masters—much like indices that begin to steer capital allocation. It also opens with S&P credit ratings constraining sovereign choices (Erdoğan), echoing metrics displacing discretion.
msmash
2025.09.09
50% relevant
Quarterly earnings targets function as powerful metrics that shape corporate behavior; LTSE’s push to allow semiannual reporting is an explicit attempt to loosen the grip of short‑term metrics on firms and capital allocation.
msmash
2025.09.09
76% relevant
Slok cites domination of passive investing, high correlation, and concentration as reasons 'there is no alpha left,' aligning with the thesis that index benchmarks now steer capital flows and behavior, weakening price discovery and active returns.
James R. Copland
2025.09.05
66% relevant
The article highlights how passive index giants (BlackRock, Vanguard, State Street) control over 20% of U.S. market cap and are the largest shareholders in 88% of S&P 500 firms, then urges curbing their voting power—an example of index-linked structures steering corporate behavior and governance rather than merely measuring it.
Daniel Peris
2025.08.20
100% relevant
The article argues that SP5’s cap‑weighted design and its dominance since 1957 have created a feedback loop where index-linked products and media use drive the market they were meant to observe.