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What happens to index fund’s holdings of stocks that are de-listed?
What if the de-listed stock is a significant part of the index fund's holdings?
If a de-listed stock is a significant part of an index fund's holdings, the fund manager may choose to hold onto it for a certain period of time to see if it is re-listed or becomes actively traded again. If it doesn't, then the manager will likely sell it off and reinvest the proceeds into other securities.