First published in the Financial Times (12 June)

Toby Nangle asks how much it will cost investors not to have an opinion on SpaceX (Alphaville, FT.com, June 10). For the 11mn people enrolled in UK defined contribution default funds, the question is sharper still: they do not have the option of an opinion, the index has one for them.

Nangle’s diagnosis is exact. Nasdaq’s fast-entry rule pulls SpaceX into the Nasdaq-100 index after 15 trading days rather than 63. FTSE Russell has gone further. S&P Dow Jones, to its credit, has held the line.

The mechanical consequence, on our modelling, is that roughly $17.7bn of passive demand will be conscripted into SpaceX on day 15, of which about $3.9bn comes from MSCI World-tracking vehicles, the benchmark to which the great majority of UK DC default funds are anchored.

This is not a debate about indexing in the abstract. It is a transfer of price-setting authority from investors to issuers and exchanges, paid for in the retirement incomes of people who have never heard of the Nasdaq listing rules. A UK DC saver mechanically tracking MSCI World now has less exposure to the entire UK market (3.7 per cent) than to Nvidia alone (5.6 per cent). Under plausible scenarios to 2036, the UK weight falls below 3 per cent and an “AI bloc”, SpaceX, OpenAI, Anthropic and the existing Magnificent Seven, exceeds 40 per cent of the global benchmark. The historical analogue for that degree of single-bloc dominance is Japan in 1989. UK pensioners were not asked then either.

And this is before one mentions the deleterious effect on the UK economy itself, of mechanically exporting British pension capital to the balance sheets of the UK’s competitors at a moment when domestic productive investment has never been more needed.

Nangle is right that not having an opinion is going to cost something. The uncomfortable truth is that, for the British DC pensioner the cost is being collected automatically through a default fund whose architecture was never designed for an index whose rules are now being rewritten around a single generation of megastar listings.

Index inclusion methodology has become, in effect, UK retirement policy. It should be debated as such.