I do not understand this. Are you saying these companies issue fresh shares which are then bought by ETFs/ funds that track the index? Does that not mean they are diluting the shareholding of the existing shareholders?
Yes, that’s exactly what it means. They are slightly diluting the shareholding, just like the times when executive options vest and then are transferred I to new shares previously held in Treasury.
Yet more evidence that any predictable market behaviour will soon return to equilibrium. Just like physics!
Yup, there are always takers for free money and these companies are able to be first in the queue.
This part of the market has become more efficient.
I do not understand this. Are you saying these companies issue fresh shares which are then bought by ETFs/ funds that track the index? Does that not mean they are diluting the shareholding of the existing shareholders?
Yes, that’s exactly what it means. They are slightly diluting the shareholding, just like the times when executive options vest and then are transferred I to new shares previously held in Treasury.