Goldman Warns Nasdaq Rebalance Won't Solve Over-Concentration Issue As Friday OpEx Looms

The Nasdaq special rebalancing (which is due to take place this Friday) is unlikely to solve the problem of extreme market concentration, and the index will remain too concentrated to be considered an actively managed diversified fund, according to Goldman Sachs strategists.

Earlier this month, the collective weight of the largest Nasdaq-100 constituents exceeded the level that Nasdaq generally treats as over-concentration.

NDX quarterly rebalances are designed to prevent any issuers from individually carrying an index weight greater than 24%. The rebalances are also intended to prevent issuers with individual index weights greater than 4.5% from collectively accounting for more than 48% of the index.

Authored by Tyler Durden via ZeroHedge July 17th 2023