The index funds will sell out on the close of its last day in the index. You see a massive chunk of turnover at the 4.10pm match in every stock as the index funds rebalance.
Active funds may sell a small number if they care to keep the bet size the same, for example, if TGR was .25% of the index and the funds weight was 1.25% they might sell .25% in that 4.10pm rotation to maintain their overweight at 1.00%.
If they were mandated to only hold index stocks theyd have to sell, but this is extremely rare. Fund managers are never constrained like that, it would bar them from participating in IPOs, for example.
- Forums
- ASX - By Stock
- TGR
- Ann: S&P DJI Announces March 2021 Quarterly Rebalance
Ann: S&P DJI Announces March 2021 Quarterly Rebalance, page-17
-
- There are more pages in this discussion • 1 more message in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)