Question A:
Nasdaq has been consulting on inclusion of the largest companies in its indexes: https://indexes.nasdaqomx.com/docs/NDX_Consultation-February_2026.pdf
Changing the rules for index inclusion to allow fast-track entry by extremely large IPOs (including waiving the free float requirement) is consistent with the objectives of passive index-based investing.
Responses
Responses weighted by each expert's confidence
Question B:
Changing the rules for index inclusion to allow fast-track entry by extremely large IPOs (including waiving the free float requirement) will make index fund investors measurably better off.
Responses
Responses weighted by each expert's confidence
Question A Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
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 Viral Acharya |
NYU Stern | Bio/Vote History | ||
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Due diligence and IPO performance might be key to retaining sustained passive investor interest in index trading.
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 John Campbell |
Harvard | Bio/Vote History | ||
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 John Cochrane |
Hoover Institution Stanford | Bio/Vote History | ||
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The move makes the index better as information. But it makes the index worse as a traceable commodity, as funds that must track the index have to buy scarce shares.
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 Douglas Diamond |
Chicago Booth | Bio/Vote History | ||
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 Wenxin Du |
HBS | Bio/Vote History | ||
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 Darrell Duffie |
Stanford | Bio/Vote History | ||
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 Eugene Fama |
Chicago Booth | Bio/Vote History | ||
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Depends on the size of the free float.
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 Xavier Gabaix |
Harvard | Bio/Vote History | ||
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 Itay Goldstein |
UPenn Wharton | Bio/Vote History | ||
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 John Graham |
Duke Fuqua | Bio/Vote History | ||
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 Campbell R. Harvey |
Duke Fuqua | Bio/Vote History | ||
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Classic trade-off of representativeness (market portfolio) and investability (limited free float). Waiving the free-float (or the ad hoc rule NASDAQ has suggested) will lead to a dysfunctional situation with index funds chasing limited float (with potential price distortions).
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 Harrison Hong |
Columbia | Bio/Vote History | ||
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 Wei Jiang |
Emory Goizueta | Bio/Vote History | ||
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 Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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See Owen Lamont for a takedown on this proposal
-see background information here |
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 Arvind Krishnamurthy |
Stanford GSB | Bio/Vote History | ||
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 Camelia Kuhnen |
UNC Kenan-Flagler | Bio/Vote History | ||
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 Michelle Lowry |
Drexel LeBow | Bio/Vote History | ||
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 Sydney Ludvigson |
NYU | Bio/Vote History | ||
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 Matteo Maggiori |
Stanford GSB | Did Not Answer | Bio/Vote History | |
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 Loretta Mester |
UPenn Wharton | Bio/Vote History | ||
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Will give passive investors access to large, growing tech firms faster, but will induce undesired volatility.
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 Tobias Moskowitz |
Yale School of Management | Bio/Vote History | ||
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Not sure what it has to do with passive investing.
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 Tyler Muir |
UCLA Anderson | Bio/Vote History | ||
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Technically agree: passive mainly about market cap weighting everything, so including a top 40 company is consistent with that. Not sure this is a good idea though (see b)
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 Stefan Nagel |
Chicago Booth | Bio/Vote History | ||
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The point of passive investing is to hold an approximation of the market portfolio without taking a view whether the price is "right". As future massive IPOs will account for a significant share of aggregate market cap and be liquid, inclusion is consistent with these objectives.
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 Dimitris Papanikolaou |
Northwestern Kellogg | Did Not Answer | Bio/Vote History | |
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 Jonathan Parker |
MIT Sloan | Bio/Vote History | ||
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 Christine Parlour |
Berkeley Haas | Bio/Vote History | ||
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 Thomas Philippon |
NYU Stern | Bio/Vote History | ||
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 Manju Puri |
Duke Fuqua | Bio/Vote History | ||
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 Michael R. Roberts |
UPenn Wharton | Bio/Vote History | ||
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 Paola Sapienza |
Hoover Institution Stanford | Bio/Vote History | ||
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Free float requirements ensures that index-tracked stocks are actually tradeable at scale. If a large portion of shares is locked up (by founders, governments, strategic holders), passive funds trying to match index weights will face illiquidity - waiving the requirement will arm
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 Amit Seru |
Stanford GSB | Bio/Vote History | ||
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 Robert Stambaugh |
UPenn Wharton | Bio/Vote History | ||
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Maintaining low trading costs seems in conflict with buying from IPO flippers. I would also not support deviating from free-float weighting by applying float multipliers.
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 Laura Starks |
UT Austin McCombs | Bio/Vote History | ||
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While tracking error would be reduced, adding an IPO and waiving free float requirements would not seem consistent with passive indexing objectives.
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 Jeremy Stein |
Harvard | Bio/Vote History | ||
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 Johannes Stroebel |
NYU Stern | Bio/Vote History | ||
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 David Thesmar |
MIT Sloan | Bio/Vote History | ||
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Waiving the freel float requirement is ok. what really matters is liquidity and dollar size of the free float. if it's there, it can be part of the index
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 Sheridan Titman |
UT Austin McCombs | Bio/Vote History | ||
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 Stijn Van Nieuwerburgh |
Columbia Business School | Bio/Vote History | ||
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Not enough float is not consistent with liquid index investing.
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 Nancy Wallace |
Berkeley Haas | Bio/Vote History | ||
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Financial Times February 25, 2026
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 Toni Whited |
UMich Ross School | Did Not Answer | Bio/Vote History | |
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 Haoxiang Zhu |
MIT Sloan | Bio/Vote History | ||
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Rules about index inclusion are primarily made by the market, for the market. As long as proposed changes to the methodology are broadcasted with a sufficient lead time and interested parties have a chance to provide feedback, it is consistent with passive investing.
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Question B Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
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Viral Acharya |
NYU Stern | Bio/Vote History | ||
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John Campbell |
Harvard | Bio/Vote History | ||
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John Cochrane |
Hoover Institution Stanford | Bio/Vote History | ||
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If you want IPOs, buy IPOs.
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Douglas Diamond |
Chicago Booth | Bio/Vote History | ||
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Wenxin Du |
HBS | Bio/Vote History | ||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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I'm uncertain how one would measure the welfare improvement in a way that captures this effect.. Perhaps someone will be able to do this,.
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Eugene Fama |
Chicago Booth | Bio/Vote History | ||
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Xavier Gabaix |
Harvard | Bio/Vote History | ||
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Itay Goldstein |
UPenn Wharton | Bio/Vote History | ||
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John Graham |
Duke Fuqua | Bio/Vote History | ||
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Campbell R. Harvey |
Duke Fuqua | Bio/Vote History | ||
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The forced buying by passive funds in the 15 day window in stocks with limited float may lead to a transfer from passive fund investors to the IPO issuers. That is, predictable buying can have an adverse price impact.
-see background information here |
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Harrison Hong |
Columbia | Bio/Vote History | ||
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Wei Jiang |
Emory Goizueta | Bio/Vote History | ||
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Do we really think catching the IPO after 20 days is paramount for index investors? The link is to the most recent summary I found from Jay Ritter that continues to cast doubt on long run performance of IPOs.
-see background information here |
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Arvind Krishnamurthy |
Stanford GSB | Bio/Vote History | ||
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Camelia Kuhnen |
UNC Kenan-Flagler | Bio/Vote History | ||
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Michelle Lowry |
Drexel LeBow | Bio/Vote History | ||
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Sydney Ludvigson |
NYU | Bio/Vote History | ||
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Matteo Maggiori |
Stanford GSB | Did Not Answer | Bio/Vote History | |
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Loretta Mester |
UPenn Wharton | Bio/Vote History | ||
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There is a tradeoff between larger coverage and increased volatility
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Tobias Moskowitz |
Yale School of Management | Bio/Vote History | ||
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Measurably better off compared to the status quo? I'm not sure. Better access? Better efficiency? Depends on what would change with this new inclusion rule. Seems hard ot connect the dots.
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Tyler Muir |
UCLA Anderson | Bio/Vote History | ||
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Predictable forced buying into thin float at IPO would have big price impact, likely making index fund investors worse off at benefit of insiders. I don't see huge cost to waiting a year and let price discovery happen first
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Stefan Nagel |
Chicago Booth | Bio/Vote History | ||
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Perhaps not, given the typically poor average post-IPO performance of newly listed stocks. On the other hand, it avoids giving passive index investors an implicit bias against certain sectors relative to the market portfolio.
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Dimitris Papanikolaou |
Northwestern Kellogg | Did Not Answer | Bio/Vote History | |
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Jonathan Parker |
MIT Sloan | Bio/Vote History | ||
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Christine Parlour |
Berkeley Haas | Bio/Vote History | ||
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Thomas Philippon |
NYU Stern | Bio/Vote History | ||
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Manju Puri |
Duke Fuqua | Bio/Vote History | ||
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Michael R. Roberts |
UPenn Wharton | Bio/Vote History | ||
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Paola Sapienza |
Hoover Institution Stanford | Bio/Vote History | ||
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This mechanically would drive up the price before and at inclusion- especially if there is limited float - will create inflated prizes
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Amit Seru |
Stanford GSB | Bio/Vote History | ||
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Robert Stambaugh |
UPenn Wharton | Bio/Vote History | ||
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Laura Starks |
UT Austin McCombs | Bio/Vote History | ||
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Jeremy Stein |
Harvard | Bio/Vote History | ||
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Johannes Stroebel |
NYU Stern | Bio/Vote History | ||
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David Thesmar |
MIT Sloan | Bio/Vote History | ||
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It will increase the market cap of the index (replace the smallest component with a larger stock), so increase the supply of index funds for index investors.
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Sheridan Titman |
UT Austin McCombs | Bio/Vote History | ||
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Stijn Van Nieuwerburgh |
Columbia Business School | Bio/Vote History | ||
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Nancy Wallace |
Berkeley Haas | Bio/Vote History | ||
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Financial Times Feb. 25, 2026
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Toni Whited |
UMich Ross School | Did Not Answer | Bio/Vote History | |
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Haoxiang Zhu |
MIT Sloan | Bio/Vote History | ||
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