RE: Massive Price insensitive buyers coming in next week9 Sep 2025 19:18
Wow there are some uninformed rubbish being posted on here.
Many funds are passively managed, and by design, these funds are mandated to replicate the index composition—not to make discretionary decisions.
Passive funds, including ETFs and index-tracking superannuation products, are structured to mirror the index holdings and weightings exactly. When a stock is added to the ASX 200 or ASX 300, these funds are contractually required to purchase it to ensure alignment. Thus the buying is pretty much compulsory.
Australian ETFs alone have seen rapid growth. By end‑September 2024, the total Australian ETF industry reached A$226.6 billion, a nearly 50% increase year-on-year, driven largely by inflows into these passive funds.
In Australia, the shift is evident: a large portion of inflows continues moving into low-cost passive ETFs, largely from providers like Vanguard, iShares, and BetaShares.
By contrast, actively managed funds have discretion and may opt not to buy new index constituents.
Simplified Explanation:
Passive funds ARE mandated to buy newly added stocks to indices like the ASX 200—this is about index tracking accuracy, not regulation.
Active funds are not obligated to buy; they make decisions based on strategy.
Given the large scale of passive fund AUM, their required buying can create significant real demand around inclusion dates.
It should be exactly the same for both the GDXJ and GDX, they are passively managed and VanEck should be contractually obliged to accurately track the underlying Funds.