facebookWhat happens to the ETF when a stock in it gets delisted? - Seedly

Anonymous

10 Jul 2021

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General Investing

What happens to the ETF when a stock in it gets delisted?

Does the ETF finds new stock as replacement or allocate the delisted stock % to other remaining companies?

Discussion (2)

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Tan Choong Hwee

10 Jul 2021

Solutions Specialist at Providend

It depends on the type of ETF. If it is a passive index tracking ETF, the delisted stock probably drop out from the index and the ETF will follow suit. If it is an active thematic ETF, then it is up to the ETF manager discretion to replace or redistribute.

It will based on the market cap of the companies and re-distribute. Eg. S&P500. If 1 down, another one must come in, else become S&P499.

Scare china stock delist? Me too.πŸ˜…β€‹β€‹β€‹

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