There is no analysis done to be included in the S&P500. It's 100% rules based. It's extremely unlikely that a stock like NKLA would ever qualify for the S&P500 but it was included in the Russel 2000 (also rules based), and by definition in any total stock market index fund.

Seeing if they follow the rules IS analysis. As is the work of coming up with the rules based on some dataset, which S&P did and does.

Or do you think they yolo’d that criteria out in a vacuum?

It just isn’t micromanaging type analysis. Rather a ‘we think this chunk is worthwhile’ type analysis.

Sure, but in the context of stocks “analysis” typically refers to “fundamental analysis” which means some sort of deep dive into the business model and financial statements of the company… the rules of the S&P are more like “it the market cap above X” and “did it make a profit in the last year”. This is by design as far away from discretionary/traditional “fundamental analysis” as can be.

The caps are set so that the right number of companies fit. Hence ‘500’ in this case. And change to ensure it all works with their goals.

There are many different types of strategies that you’re talking about - momentum, ‘value’, etc. that all set various rules, and are applied in similar ways too.

The analysis I’m talking about isn’t that different, and is still analysis based on fundamentals. It’s just used a bit differently and intentionally trying to be coarse and relatively transparent/mechanical. Private funds keep it opaque and ‘secret sauce’, and have the freedom to do whatever (within the limits of their charter).

Other indexes have more in depth rules that cover exactly the other elements you’re discussing (sector specific indexes, ‘green’ indexes, ‘good governance’ indexes, etc.).

They still use the same analysis tools though.

And the fund managers do have some small discretion to deviate from the index they track