Goldman’s Kostin Urges Putting Brake on Stock-Index Reshufflings
- Big Tech hegemony is headache for index providers, fund pros
- Russell mulls whether to cap stocks in standard style indexes
Goldman strategist David Kostin
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Goldman Sachs Group Inc. has a message for benchmark managers who are weighing big reshufflings of their indexes to account for a handful of stocks growing to interstellar size: slow down.
Plans are underway among several providers to tweak index methodologies to limit the influence of megastocks like Apple Inc. and Microsoft Corp., whose weighting in some gauges is pushing up against regulatory limits aimed at preserving diversification. While that’s a worthy goal, Goldman strategist David Kostin says that rewiring indexes to which tens of trillions of dollars are benchmarked is a task that should be approached with caution.