The surprisingly lucrative business of making a list of 500 stocks

"Once a month, from 1989 to 2019, David Blitzer walked into a well-appointed conference room with a view of downtown Manhattan to discuss the 500 largest and most important public companies in the U.S., the ones whose stock just about any American can buy. Blitzer was a member of, and then chair of, the committee that makes the S&P 500. It's like the Billboard Hot 100, except instead of ranking the most popular songs in America, it lists the most valuable companies."

"The S&P 500 is famous. It's cited constantly in newspapers and on TV; it's the basis of millions of investing-for-retirement plans. Less well-known is that S&P Global, the company that makes the S&P 500 and that employed Blitzer, is itself on the S&P 500 list. One reason why is that S&P Global makes hundreds of millions of dollars every year in revenue just from the S&P 500. The company has other larger businesses, like rating bonds, but its indexing business is particularly lucrative and profitable."

From 1989 to 2019 David Blitzer chaired the committee that decides which companies belong in the S&P 500, meeting monthly to evaluate the 500 largest public companies. The S&P 500 functions as the primary stock-market barometer and underpins many retirement investment plans. S&P Global, which creates the index, is itself a member of the index and earns hundreds of millions annually from the S&P 500 through its indexing business. That indexing business is highly profitable and faces limited erosion from competitors. As a result, millions of Americans' savings are indirectly concentrated in a handful of dominant tech firms and their AI investments.

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