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S&P’s decision to add Tesla in one shot demonstrates the power of passive investing

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CEO of Tesla Motors Elon Musk reacts following the company’s initial public offering at the NASDAQ market in New York June 29, 2010

Brendan McDermid | Reuters

S&P’s action on Tesla showed the growing power of indexers and passive investing.

S&P Dow Jones Indices has announced that Tesla will be added to the S&P 500 using the closing price on Dec. 18 in one single action.

S&P has been canvassing big institutional investors to try to figure out whether Tesla should be added in one fell swoop — on the close on Friday the 18th, which is a quadruple witch and the traditional day stocks are rebalanced in the S&P — or whether it should be split up into several separate trading days.

The concern:…



Source cnbc.com

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