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Index rebalancing strategy boosted hedge fund profits this year

The approach has benefited from record trading volumes and the public listing of SpaceX, boosting performance for hedge fund managers.

Reported · Written up by our desk · Hedge Funds

Hedgeweek, citing a report by the Financial Times, says a long-running hedge fund trading strategy built around stock index rebalancing has produced outsized profits in 2024.

The piece attributes the strong results to record trading volumes, which can increase opportunities for rebalancing related trades during index changes.

It also points to a landmark public listing, SpaceX, as a factor that helped drive activity tied to index rebalancing flows.

Overall, the strategy has continued to deliver for hedge funds this year as market reconstitution events generated unusually high levels of trading interest.

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