RE: FTSE25013 Jan 2026 17:43
Apparently index funds themselves aren't allowed to pre-buy shares before the promotion has actually happened, because it is in their fund mandates to track the index rather than try to predict it - otherwise they risk creating tracking error.
What actually happens when a promotion is likely is:
- Other (active) funds and market makers buy up shares in anticipation of the forced demand from index funds, causing the price to surge ahead of the actual promotion
- After the promotion, the index funds buy the shares from these active funds/market makers, over a few days or weeks.
So the index funds are probably still buying Saga shares now, but gradually to avoid impacting the price as far as possible