But as Tesla enters the S&P 500 after a decade as a public company and an astronomical total return since its IPO price of $17 in 2010, index fund investors may also wonder what they have missed out on already.
At the relatively small weighting that Tesla will have in the index, even as one of its largest holdings, Tesla will not hold outsize influence over an index fund investor's return whether it goes up or down by a lot in any given year.
Tesla will begin trading next Monday morning, as part of the S&P 500 index through which most investors now get their core U.S. large-cap market exposure.
The index fund has thoroughly disrupted the role of active stock pickers in the market, but in an era of accelerating disruptive business models across sectors of the economy, stocks like Tesla remind investors that they still need to make some conviction bets to generate above-average returns.
if an investor had put $5 of every $100 invested in an S&P 500 index fund into Tesla shares at the beginning of 2020, their return would have increased by roughly 31%, according to DataTrek Research, based on performance through last Friday, Dec. 11.