Some brief calculations on the NASDAQ 100 (NDX) rebalance: $NASDAQ 100(NDX)$ $NVIDIA Corp(NVDA)$
$NVIDIA Corp(NVDA)$ to be reweighted 7.3% to 4.3%, a loss of 3 percentage points. Approx. £300 BILLION tracks the NDX globally. So, an initial loss of investment in NVDA through these funds of $9 BILLION.
This is equivalent to 19 MILLION NVDA shares sold at the current stock price (less than half a day's trading volume).
Representing just 0.8% of the 2.371 BILLION NVDA shares float.
I think there may be some mild artificial price depression for a few weeks but nothing major.
Can anyone sensible (out of the 3% of sensible people that populate this forum) please comment on this?
Also, there is this misperception that all this institutional selling is going to suddenly happen on Monday 24th July. That has to be nonsense. It seems overwhelmingly likely that funds are already selling to adjust their positions now that the target weightings are published, for a range of reasons including: logistics, reducing market impact and minimising opportunities for front-running.
I think the negative impacts of the rebalance may be felt more by the tracker funds (e.g. the Investco QQQ/TQQQ/SQQQ) instead of the Magnificent Seven, as the funds will lose performance.
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