NEA 0.00% $2.10 nearmap ltd

Unfortunately not. Index funds are very aware of what is moving...

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    Unfortunately not. Index funds are very aware of what is moving and and out of the various indexes and use various methods to obtain (or dispose of) shares in companies moving in and out when required. The recent run up is partially because of the ASX200 funds' demand, but more because of the general excitement surrounding the sudden realisation that the exponential nature of the company finances is becoming a reality.

    A move by NEA into the ASX200 will give a representation of less than 0.5% of that index, so the funds which are so inclined would take that as a representative proportion of their portfolio - and they will gather part of that over a period using other funds with which they are associated (say an ASX300 fund), and then transfer the funds at the review date.

    You will see on the night of the review there will be a heap of large cross trades after close on the ASX which will be the funds switching the shares between them - often at very strange prices compared to the market at the time.

    The effect on the price is always difficult to determine, sometimes it increases, sometimes the opposite - I've never found a pattern which relies solely on the change in index to blame for a price change in an SP. Company dynamics more than anything determines the possible outcomes.
    Last edited by Inductor: 16/04/19
 
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