According to the agreement of the fund contract, even the passive fund that tracks the index can generally adjust for one or two weeks before and after the index, giving a change period, and it is not required to adjust before the close of the effective date, because such centralized adjustment is easy to cause congestion and bring about the expansion of the buying price, which is unfavorable to investors. However, because the evaluation index of index funds is the tracking deviation of the index, rather than the absolute return, many funds still choose the simplest and safest method to buy before the close of the effective date to ensure the strict tracking of the index.

When the proportion of A-shares increases, the weights of other Asia-Pacific regions will be diluted, so at the close of today, several regions with higher weights in the emerging market index, such as South Korea, Indonesia, China and Taiwan Province Province of China, all experienced the opposite phenomenon and finally fell sharply. The construction of foreign passive capital positions means that when the A-share ratio of foreign indexes will increase, the funds tracking these indexes will also increase the A-share ratio to ensure that the tracking error of the indexes is not large. The fund positions that track these indexes are called foreign passive fund positions.

At present, most foreign passive funds in A-shares are funds of MSCI and FTSE Russell Index. When MSCI or FTSE Russell increase the proportion of A shares, funds tracking these indexes will also become passive buyers. Because the difference between these two numbers is very small, between 1 100 million and 200 million, it doesn't make sense, but today I found that the difference between these two numbers is more and more exaggerated. Last month, for example, the daily average net foreign investment in Shanghai Stock Connect was 500 million yuan less than the net inflow, and the daily average net foreign investment in Shenzhen Stock Connect was 800 million yuan less than the net inflow. If this growth rate is maintained, it will increase by 300 billion yuan a year, which is very exaggerated.

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