That sounds like a "no true scotsman" argument. Even passive investors need to pick some methodology of how to pick assets and how to relatively weigh them, and while you can make that as mathematically simple as possible, it's arguably an active decision.
replyOr would you say that e.g. an ETF tracking MSCI ex-US is not a passive fund?
I’d also argue that "passive investor" applies more to the buy and hold strategy when paired with low engagement in the account (few transactions, or scheduled transactions).
replyI’d consider someone that puts $50 into Coca Cola stock every paycheck a passive investor
> I’d consider someone that puts $50 into Coca Cola stock every paycheck a passive investor
replyThey’re not. Passive vs active are terms of art in investing. They refer to the degree selection effect is at play.
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replyA broader index that tracks the NASDAQ tracks the NASDAQ 100 and is impacted by this rule.
replyYou buy VTI, you're impacted.
> You buy VTI, you're impacted
replyVTI “seeks to track the performance of the CRSP US Total Market Index” [1]. Not the NASDAQ 100. It will include the latter’s components. But it shouldn’t reference its weights.
[1] https://investor.vanguard.com/investment-products/etfs/profi...
That index seems to add new listings even more quickly (5 trading days!), so this effect doesn’t seem to be easy to escape just by switching indexes. MSCI is also on the order of days.
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