Editor? /? Niujishang

Design? /? Du Kai

Source? /? The Financial Times, by Michael? Mackenzie.

Tesla's share price has risen more than six times this year, and the closing price of165438+1October 24th reached $555. The Standard & Poor's Dow Jones Index has said that it will include the group in the benchmark of US stocks, which will stimulate the stock price to rise, because institutions and index tracking funds are increasing their holdings of the stock. The stock rose by a third in eight days. ?

Standard & Poor's Dow Jones Index Company announced the inclusion of Tesla in the Standard & Poor's 500 Index before the close of 165438+ 10/6. According to Monday's closing price 165438+1October16, Tesla will become the top ten in the index. As soon as the news came out, after a new wave of buying, Tesla's market value has exceeded 500 billion US dollars. ?

"There is a long time between the announcement that Tesla will be included in the Standard & Poor's 500 Index and the official date of 18 in February/8." Charles schwab (Charles? Schwab) ETF Marketing Director Chris johnson (Chris? Johnson) said, "It takes a long time to preset on such a highly volatile stock." ?

Profit for five consecutive quarters?

The conditions for listed companies to join the Standard & Poor's 500 Index are as follows: the company's headquarters must be located in the United States; Must be listed on new york Stock Exchange, Nasdaq or CBOE; The market value is above $8.2 billion; Must be profitable for four consecutive quarters. ?

Tesla has been profitable for five consecutive quarters, and the output and delivery in the latest quarter have also set a new record. Tesla met the requirements of the Standard & Poor's 500 Index in September, but was not selected at that time. Now that it is confirmed to be included, this electric vehicle manufacturer will take a major step on the road of blue-chip stocks. ?

Tesla's inclusion in this widely watched stock market index means that investment funds tracking the S&P 500 will have to buy Tesla shares worth billions of dollars. ?

According to Bloomberg's data, Musk's net assets and stocks have risen simultaneously, increasing by $654.38+000 billion since the end of last year, reaching $654.38+0279 billion. ?

"Tesla's share price has always been one of the most incredible things in 2020." David (David? Kostin) said in a research report that "investors have been paying attention to the substantial increase in its market value this year." ?

Tesla's profit was achieved in the context of a broad rebound in global stock markets, which pushed the Dow Jones Industrial Average to 30,000 points for the first time. The increase is due to optimism about vaccine development in COVID-19 and Donald Trump? Trump) allowed to start against Joe Biden (Joe? Bid) officially handed over power. ?

Tesla's debut in the Standard & Poor's 500 Index in February will be the biggest ever, immediately making the company one of the biggest weights in the index. Traders said that the upsurge of passive investment (funds seeking to reflect the performance of the index) amplified the impact of this move on the broader market. ?

The biggest deal of the Standard & Poor's 500?

According to Howard Silverblatt, senior index analyst at Standard & Poor's Dow Jones Index Company? Passive funds such as Vanguard and Fidelity, owned by Silverblatt, with assets of $45.9 trillion, track the S&P 500 index. He said that the inclusion of Tesla in the index will create about $5 1 billion in stock demand for these investment vehicles. ?

Another $6.7 million actively managed fund is based on the S&P 500 index. Goldman Sachs analysts estimate that among the 189 large-cap funds they tracked, 157 funds with total assets of $500 billion did not hold Tesla at the beginning of the fourth quarter. ?

According to the data of Standard & Poor's Dow Jones Index, Tesla has nearly $400 billion of shares to trade, which dwarfs the share prices of Berkshire Hathaway and Facebook when they joined the index, which were $65.438+$02.7 billion and $90 billion respectively. ?

"Tesla is the largest company we are considering for inclusion in the Standard & Poor's 500 Index." Silver Blatter said that the automaker was eligible to be selected after it announced its fourth consecutive quarterly profit in July. ?

Market makers who hold stock inventories for the convenience of trading are also considering when to increase their holdings of Tesla shares, and they balance the expected large fluctuations of stocks with the exact demand. For large trading banks and brokers, this means that large trading gains and losses are inevitable. ?

What makes market makers and passive fund managers feel complicated is how other investors get ahead of them, thus pushing up the stock price. Tesla has risen by 540% this year. Traders said that it may be difficult for market makers to hedge against any downside risk of Tesla's price before it is included in the Standard & Poor's 500 Index in June 5438+February. ?

In the past decade, as investors put more money into passive funds, the composition of major stock benchmarks has become more and more important. When a benchmark increases or decreases enterprises, ETF will adjust its stock synchronously, and strive to reflect the index as much as possible at the lowest cost. On this basis, they are judged by an index called tracking error, and minimizing the error is the primary task of passive fund managers. ?

"As an index provider, we pay attention to tracking errors by surgery." Luke Olivier, Investment Director of DWS Americas Index (Luke? Oliver) said, "This will be the whole action of the entire market ecosystem around this point." ?

Generally speaking, when a stock is added to the Standard & Poor's 500 Index, passive foundations seek to buy as many shares as possible at the end of trading the day before joining to avoid tracking errors. Market makers usually agree to guarantee day-end trading. But the scale of Tesla complicates the plan. Some fund managers are now discussing buying Tesla shares at 4pm in new york or before the close of the next trading day, although this may increase their tracking error. ?

Standard & Poor's Dow Jones Index said that due to Tesla's huge market value, they will consult investors whether the company will join once or twice. ?

Trading banks, market makers and fund managers said that they expected the trading volume to be very large on 65438+February 18, the last trading day before Tesla officially joined the Standard & Poor's 500 Index. Even without Tesla, this day is usually busy for the market, because it is the last few days of big deals before the market slows down before Christmas. ?

Standard & Poor's is discussing how to add Tesla to the index because of its greater weight, which will also reduce the influence of the other 504 constituent stocks. It has said that it may eventually join Tesla in two steps to slow down the process. ?

Castle? Greg sutton (Greg? Sutton) said that the two-step approach can solve the concern about the excessive influence of Tesla and some S&P stocks. ?

ETF providers must provide feedback to Standard & Poor's before last week, and index providers are expected to decide how to proceed before165438+1October 30th. Whether it is a one-time entry or a two-step walk, they said that the closing of the trading day may form a busy situation and they don't want any episode. ?

"This is the biggest transaction in the S&P 500 index, but it is not the biggest transaction handled by our company." Matthew Bartolini (Matthew? Bartolini said.

This article comes from car home, the author of the car manufacturer, and does not represent car home's position.