Index Rebalancing: Adjusting Asset Weights

Index rebalancing is a process that involves adjusting the weights of assets within an index to better reflect its intended purpose. This is done to ensure that the index accurately represents the market or sector it is designed to track.
By rebalancing, the index maintains its integrity and continues to serve as a reliable benchmark for investors and financial professionals.


It is important to note that index rebalancing can impact the performance of index funds and ETFs, as they are required to adjust their holdings to match the new weights of the index.



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