What's behind Nasdaq 100's first-ever ‘special rebalance’?

(Image: Bloomberg)

Thu, 13 Jul 2023

By Lu WangWhatever theories are being proffered as to why index overseers chose to cap the influence of technology megacaps in the Nasdaq 100, the real reason is a simple one. The special rebalance, the first ever of its kind, is intended to prevent fund managers linked or benchmarked to the index from violating a Securities and Exchange Commission (SEC) diversification rule. Specifically, it’s one that limits the aggregate weight of the largest stock holdings – those with a 5% representation or greater – to 50%, acc...

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