From my understanding, I think that funds will need to reflect the investment of companies in the asx 200 / 300. So I would presume that they would need to sell.
Notwithstanding - there would have been shorts held by the funds to derisk the additional investment. - so there will be some closing of these short positions. I am unsure of the overall net effect tbh - but i would think there may be a net-position of shares sold for the rebalancing.
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