LTR: Short squeeze coming for shorters - 2nd highest likelihood in all ASX, page-2681

It's not that institutions like super funds HAVE to buy in or maintain index weight....

• there are some institutions and funds that can only invest in certain asset classes although these are few that would only have say ASX100
• but many instituitions limit investment to index listed entities in their mandate (say ASX300) which would therfore include ASX100 obviously
• Performance is what is important, and funds (especially super funds) measure performance against say the ASX200 index or whatever.
• either underperformance or over performance against their benchmark is called "tracking error". Significant tracking error, particularly that is negative is to be avoided. Always owning index weight in a stock will ensure minimal tracking error, but is quite inefficient and would eliminate outperformance against the benchmark (which is what we all want). Therefore, well managed institutions pick the best industry participants (eg best two major banks) according to their research and have a larger shareholding in those while maintaining an underweight position in the other banks etc etc.

LTR has been the best performing stock in its ASX index class for I think the last 2 years running...Therefore those underweight in LTR have missed a big opportunity to outperform. Outperformance is typically called "alpha" and to achieve outperformance of the fund you manage can be achieved by having a moderate exposure to some highly performing assets while maintaining those underweight postions in the weak ones.

It seems very likely to me that LTR will again be one of, if not THE, best performing stock in its index class this financial year. So if a fund wants to outperform, they should try to obtain a market weight or larger stake in our company. Even ignoring large super funds, there are other exchange traded funds like Australian Foundation Investment and Argo that want to provide outperformance to their investors. Overall, I imagine many parties out there will be looking to increase their stakes in our company and perhaps hold an overweight position, even while Hancock Prospecting and short sellers seeking to cover their positions that will also provide price support.

It's hard to see LTR not rising in this environment as long as the timeline targets and plant recovery performance thresholds are achieved, and lithium demand out-performs supply.

regards
DF