NASDAQ rule changes....

solidpro

So NASDAQ have taken away their 6 month / 1 year delay on newly listed companies being squeezed into our pension funds. Which means any new company taking a huge hit in the first year comes out of penson funds.

Just wondering, how much is the VLS60 affected? I naively think that FTSE isn't exposed, except through a knock on effect, but is it?

Obviously I'm assuming the US Equity Index Fund is highly exposed not only to new companies IPO'ing shortly but also AI in general….#

Honestly it feels like some tech bro's fever dreams have found a hack into my pension fund and I'm wondering if I should move out into MMF for a year whilst the rubber hits the road. This isn't 'timing the market' - this is deciding to take my chips off the table whilst some very definite time-specific events happen, which I used to be protected against.

Wasn't that 6 month - 1 year delay put in as protection against people who didn't want new, high risk stock unless they implicitly bought into it?

FTSE Developed World ex-U.K. Equity Index Fund GBP Acc	25.3%
Global Bond Index Fund GBP Hedged Acc	25.2%
FTSE U.K. All Share Index Unit Trust GBP Acc	13.6%
U.S. Equity Index Fund GBP Acc	12.4%
U.K. Government Bond Index Fund GBP Acc	5.7%

masonic

VLS60 won't be affected by this because its US exposure comes from the S&P total market index. But similar changes are also planned for the S&P500, including more rapid listing and removal of the profitability filter on the largest 100 companies.

The issue will be that a large amount of shares may need to be acquired in a short space of time, particularly for the SpaceX IPO where only 5% of the share capital is being made public.

There could be a case for using an active fund for your US exposure... Maybe.

solidpro

Doesn't the S&P automatically hoover up all those big 'tech' stocks?

Active as in you get to deselect things you don't want?

poseidon1

Its gerrymandering on a grandiose and cynical level and may well occassion a future rush of companies to the senior US markets with virtually no critical oversight or due diligence. Will become yet another distasteful/corrupt legacy from this presidential term.

masonic

https://forums.moneysavingexpert.com/discussion/comment/82011054#Comment_82011054

It holds plenty of big tech, yes. Not as much as NASDAQ, but still plenty. But that big tech meets its eligibility criteria, which for S&P 500 currently include that it must have been trading for 12 month since its IPO, most of its shares traded publicly, and a positive net income over the most recent 4 quarters. The changes will allow admission of fresh IPOs and unprofitable companies if they are big enough.

Active as in a fund run by a fund manager who decides what to include and what not. People can pick their own shares, but that's a whole different ball game. There are some quite cheap active funds which could be used if they better aligned with what you wanted. But several could be criticised for being index huggers.