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Index funds follow indices and to follow an index asset manager holds a weighted basket of respective stocks. If stock is excluded from the index, asset manager
by mynegation 2y ago
Index funds follow indices and to follow an index asset manager holds a weighted basket of respective stocks. If stock is excluded from the index, asset manager sell it off and that puts downward pressure on the stock price. Reverse happens if stock is included into the index.
- jruz 2y agoThat’s what common sense makes you think, reality is big money needs someone to sell into their NVDA stock and this is how they do it. Just look at what happens to the stocks every time they get added or removed from the index, the complete opposite of common sense.