Passive fund stocks

AlanP_2

MX5huggy said:

Why did Tesla only come into a All World Global index in December? It joint the S&P then.

Before it joined the S&P500 it was a private company. Passive indexes only track listed companies so many newish businesses aren't included. There seems to be an increasing tendency not to list from what I have read as raising funds privately is a lot easier than it used to be pre-internet.

Worth considering a small allocation to an active fund (such as one from Baillie & Gifford) that includes Private Equity / Pre-IPO companies in their potential investments to secure some exposure. They started investing in Tesla a good few years ago now. Risks are higher though as your chosen managers may select companies that die away rather than soar like Tesla has.

Alexland

AlanP_2 said:

MX5huggy said:

Why did Tesla only come into a All World Global index in December? It joint the S&P then.

Before it joined the S&P500 it was a private company.

Surely it was on the Nasdaq before that for around a decade?

Thrugelmir

Alexland said:

AlanP_2 said:

MX5huggy said:

Why did Tesla only come into a All World Global index in December? It joint the S&P then.

Before it joined the S&P500 it was a private company.

Surely it was on the Nasdaq before that for around a decade?

Listed in 2010 on the Nasdaq. 

AlanP_2

Alexland said:

AlanP_2 said:

MX5huggy said:

Why did Tesla only come into a All World Global index in December? It joint the S&P then.

Before it joined the S&P500 it was a private company.

Surely it was on the Nasdaq before that for around a decade?

Yes, you're right, I'd forgotten that with all the comment about it entering S&P500.

MX5huggy

So was it in FTSE All World from 2010? 

Alexland

MX5huggy said:

So was it in FTSE All World from 2010? 

When looking an old Archive factsheet for the FTSE All World Index then you can see Tesla was the 10th biggest holding in August 2020 before it entered the S&P500 in December 2020. Now if it was big enough for inclusion in the index or a tracker fund 2010 is another matter that would be harder to determine.

https://www.ftserussell.com/analytics/factsheets/home/search?text=all-world

Either way to answer the OP's original question the fund managers use optimal sampling techniques to reduce the number of index holdings they need to trade balancing the need to be representative of the market movements while controlling transaction costs. Tracker funds do not simply buy and sell the whole market it's more sophisticated.