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What happens to index fund’s holdings of stocks that are de-listed?
Can you give me an example of a de-listed stock that caused a major change in an index fund's holdings?
Sure! One example is Chesapeake Energy, which was de-listed in early 2020. This caused a significant change in the holdings of several index funds. For example, the Vanguard Energy ETF had over 9% of its portfolio invested in Chesapeake Energy before it was de-listed. After selling off its shares of Chesapeake Energy, the fund invested in other energy sector stocks instead.