S&P Dow Jones Indices Announces Changes to the S&P/TSX Composite Index

Hi there,

I’m I right thinking that those compagnies that will be add will see their price go up because all mutual f7nds and etf that follow thoses index will have to buy them ? Or my logic is wrong and it’ s already being price in ?

As always thanks for you time !

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Asked on September 6, 2021 10:14 am

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Private answer

There is usually mixed reaction around these additions. One thing is certain, it will lead to an uptick in volume and buying pressure as you are correct - funds that track the index will be adding (or deleting) the stocks according to the changes. Overall, if one is added it is usually considered a positive development and if one is deleted, a negative.

While we do consider it a good thing for added stocks, it is usually a short term impact. In other words, never make an investment decision based on this fact. However, it nice when a company such as Bull List stock WELL Health gets added as it is a milestone achievement for them.

Mat

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Posted by Mathieu Litalien

Answered on September 7, 2021 6:35 am

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