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Comment by dlenski

7 hours ago

Yes, this is one of the benefits of a cap-weighted index fund.

It doesn't eliminate the need for the fund to rebalance, because of companies moving in and out of the index criteria.

But it certainly vastly reduces the need of the fund manager to trade.

(Also, stock buybacks and new share issuance should in principle not change a company's index weight, but in practice they sometimes do.)