Stop Waiting, Start Customizing: How Passive Investors Can Make Their Own Rules
Overview
The exclusion of the high-profile company Tesla Motors from a major equity index took many investors by surprise. The news sent the company’s shares down 21% the next trading day. That example illustrates the critical role of index providers and the level of discretion they may have in adding or removing constituent stocks. It’s just one reason to consider investing in a customized separately managed account (SMA) instead of remaining dependent on an index provider.