That sounds like a "no true scotsman" argument. Even passive investors need to pick some methodology of how to pick assets and how to relatively weigh them, and while you can make that as mathematically simple as possible, it's arguably an active decision.

Or would you say that e.g. an ETF tracking MSCI ex-US is not a passive fund?

I’d also argue that "passive investor" applies more to the buy and hold strategy when paired with low engagement in the account (few transactions, or scheduled transactions).

I’d consider someone that puts $50 into Coca Cola stock every paycheck a passive investor

> I’d consider someone that puts $50 into Coca Cola stock every paycheck a passive investor

They’re not. Passive vs active are terms of art in investing. They refer to the degree selection effect is at play.

> would you say that e.g. an ETF tracking MSCI ex-US is not a passive fund?

Assets aren’t passive or not; investing styles are. The degree to which one’s returns earn from, or are expected to earn from, selection effects determines if you’re investing passively or actively. If I say trade SPYs, I’m an active investor. If I buy and hold a custom broad-market benchmark, I’m passive. Buying MSCI ex-US without a hedge is an active investment decision. If it’s bought and held it’s more like a passive strategy over time, provided the U.S. doesn’t dramatically over or underperform the global markets.

A broader index that tracks the NASDAQ tracks the NASDAQ 100 and is impacted by this rule.

You buy VTI, you're impacted.

> You buy VTI, you're impacted

VTI “seeks to track the performance of the CRSP US Total Market Index” [1]. Not the NASDAQ 100. It will include the latter’s components. But it shouldn’t reference its weights.

[1] https://investor.vanguard.com/investment-products/etfs/profi...

That index seems to add new listings even more quickly (5 trading days!), so this effect doesn’t seem to be easy to escape just by switching indexes. MSCI is also on the order of days.

> That index seems to add new listings even more quickly

I’m not recommending that index. Just saying it’s separate from the NASDAQ 100. You can absolutely find a total-market index biased towards mature, seasoned issuers.