Tesla, AMC Shares May Attract Buying As Russell Index Reconstitution Goes Into Effect
Electric vehicle manufacturer Tesla Inc. NASDAQ:TSLA will move up a spot in the Russell 1000 Index following an annual June overhaul that will take place after the close of trading on Friday.
Annual reconstitution is done to maintain accurate market representation by capturing the shifts in the overall market and changes to individual companies over time. The FTSE Russell U.S. indexes are objectively recalibrated every June.
Among the highlights of the reconstitution is that, for the first time since 2019, the largest five companies in the Russell 1000 and 3000 Indices have been reshuffled.
Apple Leads, Alphabet, Tesla Progress: Apple Inc. NASDAQ:AAPL is in the pole position among the R1K components and Microsoft Corp. NASDAQ:MSFT is in second place.
This is the first time ever that more than one company having over a
Alphabet Inc. NASDAQ:GOOGL NASDAQ:GOOG took the third position after relegating Amazon.com Inc. NASDAQ:AMZN to fourth place. Meta Platforms Inc. NASDAQ:META slipped from the top five holdings and was replaced by Tesla.
Related Link: Is The Bottom In For Apple Stock? Here's Why Patience Is Key
Meta is now in the seventh position behind
The global index compiler also noted that UnitedHealth Group Inc. NYSE:UNH and Nvidia Corp. NASDAQ:NVDA are new entrants into the top ten holdings.
Among the 45 companies added to the R1K Index, 21 will be moving up from the R2K Index. Of these 21 companies, six would be from the energy industry and four from consumer discretionary companies such as AMC Entertainment Holdings Inc. NYSE:AMC.
Why It's Important: Although the rebalancing takes effect after the close, one can expect to see a "frenzied trading day," Barron's said.
Tesla's improved ranking in the R1K Index will likely bring in more buyers from among investors, who hold portfolios mirroring the index, the report said, citing
"With approximately