Earlier quoted context omitted.
There should be an S&P500-N fund where you can select up to N specific companies you want to exclude, and they give you a dynamic ticker which tracks that sub-set. I wonder if it’s technically feasible without absurd transaction costs, to either explicitly or effectively net out specific company exposure from an S&P500 basket. Even just a calculator which could tell you, for every share of SPY of you want to not have…
Not a finance expert, but I don't think the transaction costs would factor would they? You would own "units" in the fund, rather than the underlying security itself. The makeup of the unit however, would be dynamic
You would need to have some sort of clever accounting to make it work, although, while retail commissions are at zero, and fractional shares may become available, assembling your own index fund may be possible with only a significant time cost.