Benjamin Felix

I think those flows are really what matter to index fund investors because even a small percentage change, if it's billions of dollars changing, moving from one equity to another, that's kind of what matters for the index funds who are being forced to buy and sell shares.

I think there are probably some interesting tax considerations here too.

I don't know enough about how exactly that would play out with US listed ETFs because they do have some mechanisms to reduce

tax, but this would be a lot of buying and selling.

It'll be interesting to see how that plays out too.

So just to recap, index funds, depending on the rules of the specific indices they track, may or may not invest in these mega IPOs.

And even if they do, it's likely going to be at a weight reflecting their public float, unless we're talking about the NASDAQ 100, which as of recently would use its newly adopted float factor, which again is more conservative than their previous methodology of using the total market capitalization.

So that's kind of where we're at.

And the market changes.

Like it's not normal.

So take the S&P 500.

Normally, a company that goes public, it wouldn't even be a consideration that that company may make it into the index because it wouldn't be big enough.

Like it's the 500 leading companies in the US.

Wow.

A newly listed company is not going to fit that criteria.

But now we're in a world where, okay, companies are staying private longer.

They're going public when they're much bigger.

I mean, if I'm S&P, yeah, I'd be considering making changes too.

If you want to represent the 500 leading companies in the US market, well, just because it hasn't been listed long enough, I don't know if it makes sense to it.

For sure.