Solactive has launched a series of research papers looking at the impact incurred by index trackers at the time of reconstitution to shed light on the dynamics around their allocation and constituents, and how they can be exploited by market participants.
For asset managers tracking an index and investment bank traders trading an index any adjustments at an index level are very relevant to them as they will reflect in the trading book or investment portfolio. The rebalancing of indices is a dynamic reflection of the market which is the main purpose of a benchmark index, and the main and only criteria to do this is size (market cap for equity) which changes with share price fluctuations and other factors and has an impact on the weighting of indi