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Stocks & ETFs Affected by Nasdaq 100 Rebalance.

On 13 Jul 2023, I have posted about Nasdaq Rebalance, FAANG & More Affected? Some pf the topics covered (extracts): When will rebalance occur? Why rebalance is required? List of Nasdaq 100 index Top 20 stocks (current). Personal view of rebalance exercise. 3 “new” stocks to benefit from rebalancing (I think)? If you like to read it, click on above “Blue Title”. Show some love, give a “Like”, “Share” & “Re-post” after reading ok. Thanks. Monday - 24 July 2023 Time flies. Monday, 24 July 2023 was d-day where Nasdaq 100 rebalancing would be effected, when trading begins. Aftermath of Previous “Rebalance”. According to Nasdaq’s VP & Global Hd of index product and operations, Cameron Lilja: In 1998 rebalancing exercise, Nasdaq stocks fell sharply in the late 1990s, after investors bought up shares of internet-based companies that failed to become profitable. In 2011, the rebalancing exercise undertaken while Europe was in a debt crisis, hurt US stocks headon. Will “Stocks” Investors Be Affected? US stocks investors will be indirectly affected by the rebalance. Billions of dollars of stock will be bought & sold in response to the rebalance. Selling will occur in some of the most liquid stocks, luckily. This means price impact should be limited. Markets may experience a bit higher volatility as (a) changes become known and (b) market re-positions. Stocks affected by Rebalancing exercise Stocks with weightings Reduced. {Boo Hoo Hoo!} The 7 stocks mentioned in my original post The 7 stocks have been mentioned in my previous post; only that weighting adjustments were still under wrapped. Most “Reductions” 3 Stocks: -2.98% / $NVIDIA Corp(NVDA)$. -2.94% / $Microsoft(MSFT)$. -1.91% / $Alphabet(GOOGL)$. Stocks with weightings Increased. {Hurray!} Most “Increment” 3 Stocks: +0.64% / $Broadcom(AVGO)$. +0.45% / $Pepsi(PEP)$. +0.42% / Costco. How Will Funds Houses Administer The Changes? Funds tracking the Nasdaq-100 Index will need to sell out of top holdings to the extent prescribed by the index. Next, Funds houses will then reallocate that cash to other stocks in the portfolio. In all likelihood, the trades would have been performed at the close on 21 July; instead of prior just before 24 July. Will “Funds” Investors Be Affected? Investors of funds (eg. ETFs) tracking Nasdaq-100 Index will start 24 July with a different (re-balanced) portfolio. Differences would not be vast, but the fund will be different. Portfolios face trading costs from the rebalance that: Could cause a minor drag on performance. Selling of high-performing stocks would incur the potential for a tax bill for funds. Affected ETFs - Part One Affected ETFs - Part Two Above 2 lists contain 10 ETFs & 4 Open ended funds that tracks the Nasdaq 100. This means they will be affected by the Nasdaq 100 rebalancing exercise. Investors in any of the funds should spend some time going through the revision to see if they still fit your needs. My Thoughts: I cannot wait to witness history in the making, with the rebalance exercise. This is something “new” to me and I am curious how it will all turn out for both (a) stocks and (b) funds (ETFs or Open-ended funds). Do you think your portfolio will be affected by the rebalance exercise? Do you think you will learn something new post rebalance exercise? Please give a “LIKe”, “Share” & “Re-post” ok. Thanks. Rating is very important (to me). Would you consider “Follow me” to get firsthand read of my daily new posts? Thanks! @TigerPM @TigerStars @Tiger_SG @Daily_Discussion @TigerEvents
Stocks & ETFs Affected by Nasdaq 100 Rebalance.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.



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