Tesla is Joining the S&P 500. Here's How Your Index Funds Will Change
On the fence about investing in Tesla (NASDAQ: TSLA)? Soon enough, you may not have a choice. With the electric carmaker set to join the S&P 500 on Dec. 21, you'll automatically get a piece of Tesla if you're invested in S&P 500 index funds. Here's a look at how those funds will adjust for this latest addition to the benchmark index, along with the steps you should take to manage your risk.
Index funds like the Vanguard 500 Index Fund (NYSEMKT: VOO) and iShares Core S&P 500 ETF (NYSEMKT: IVV) are designed to mimic the performance of the S&P 500. They do this by building a portfolio that matches the index. That would be straightforward, except that indexes are not static. They change periodically, and that's when things get complicated for index funds.
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Source Fool.com
