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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: 200ma who wrote (150182)2/9/2002 8:42:52 AM
From: Follies   of 436258
 
On a market or cap weighted index, the only time funds need to rebalance is when new shares are issued or if there is a change in the components (new companies added).

For example, if the a fund owns one percent of every company in the index , no mater how much the relative values change , the fun still owns one percent so they don't need to buy more of the ones that have gone up.
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