AMC Drama Is Exposing Risks in $11 Trillion World of Indexing
- Wild moves in meme shares are roiling the ETF market
- Scale of swings, fund plumbing lead to unintended exposures
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Index funds are supposed to cut out the human-driven craziness that periodically infects markets, but the recent meme-stock fever proved the $11 trillion industry is far from immune.
The remarkable surge in shares of AMC Entertainment Holdings Inc. and a handful of other stocks is showing up in multiple exchange-traded funds, skewing portfolios, altering risk profiles and exerting outsized influence on prices.