Sharfman & Deluard on Indexing to the S&P 500

Ipse Dixit

In this episode, Bernard Sharfman and Vincent Deluard discuss their article, "How Discretionary Decision-Making Has Created Performance and Legal Disclosure Issues for the S&P 500 Index." Bernard Sharfman is a Senior Corporate Governance Fellow at the RealClearFoundation, a member of the Journal of Corporation Law’s editorial advisory board, and a former Visiting Assistant Professor of Law at the University of Maryland School of Law and the Case Western Reserve University School of Law. Vincent Deluard is the global macro strategist for StoneX, where he authors weekly research reports on global macro trends, flows, European capital markets and quantitative topics. Vincent advises large pension funds and other institutional investors on asset allocation and risk management. Sharfman is on Twitter at @s_sharfman and Deluard is on Twitter at @VincentDeluard.

They discuss how the discretionary nature of the S&P 500's Index Committee creates legal and performance issues. In particular, they discuss how the exclusion of Tesla and dual-class share structures are examples of how this discretion poorly serves investors. They discuss potential proposed solutions, offer their own solutions, and conclude by discussing what investors, scholars, and policymakers should take away from their article. This episode was hosted by Luce Nguyen, who is on Twitter at @NguyenLuce.

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