“The Tesla issue of the last few months is probably highlighting for the first time to a lot of people that the S&P is not the largest 500 companies, ” said Elya Schwartzman, founder of ES Investment Consulting LLC. With direct indexing, “you can just create your own index and say, look I want the largest 600 companies by US market capitalisation, ” he added.
NEW YORK: When the world’s most-famous electric car maker finally joins the S&P 500, it will be bitter-sweet for investors with about US$11 trillion in funds tied to the gauge. Their benchmark-hugging bets get some Elon Musk magic at last, but they pay seven-times last year’s price for the privilege.
Given the chance, how many would have added Tesla Inc to their index exposure in January? Or even June, when the shares had merely doubled?
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