# Consequences on ETF's with Tesla joining S&P500 -
**URL:** https://forum.mustachianpost.com/t/consequences-on-etfs-with-tesla-joining-s-p500/4837
**Category:** Investing / Portfolios
**Created:** [December 2, 2020, 2:39pm UTC](https://forum.mustachianpost.com/t/consequences-on-etfs-with-tesla-joining-s-p500/4837 "2020-12-02T14:39:29Z")
**Posts on this page:** 13
**Page:** 1
### Author:  [@Hello\_World](https://forum.mustachianpost.com/u/Hello_World)
#### Post date: [December 2, 2020, 2:39pm UTC](https://forum.mustachianpost.com/t/consequences-on-etfs-with-tesla-joining-s-p500/4837/1 "2020-12-02T14:39:30Z")
Big news! As all of you know by now, Tesla will be included into the S&P500 on December 21st (in one time). I feel this big change deserves a post on this forum so we may discuss the potential consequences for index trackers.
How large of a distortion do you think we may expect in ETF’s like VTI? The transactions on the 21st could be the largest in history, estimated [72 Billion USD](https://www.tijd.b/markten-live/nieuws/aandelen-buitenlandse-beurzen/tesla-tsunami-in-aantocht/10269074.html)
At Tesla’s current rate, passive funds are expected to have to [sell 35B USD in assets](https://www.bloomberg.com/news/articles/2020-07-31/stock-market-what-happens-if-tesla-enters-s-p-500) to make a hole big enough for Tesla. How does this affect ETF shares?
The following mindset goes against the Mustachian’s, but would it any sense to simply sell everything, taking your profit / losses and purchasing again after the trackers have reset? (I’m assuming not, yet I’m quite inexperienced and only got as far as buying and holding for a \>1 year…)
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### Author:  [@nabalzbhf](https://forum.mustachianpost.com/u/nabalzbhf)
#### Post date: [December 2, 2020, 2:51pm UTC](https://forum.mustachianpost.com/t/consequences-on-etfs-with-tesla-joining-s-p500/4837/2 "2020-12-02T14:51:41Z")
> [@Hello\_World](#):
>
> How large of a distortion do you think we may expect in ETF’s like VTI?
None. It isn’t based on S&P500.
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### Author:  [@MrCheese](https://forum.mustachianpost.com/u/MrCheese)
#### Post date: [December 2, 2020, 2:58pm UTC](https://forum.mustachianpost.com/t/consequences-on-etfs-with-tesla-joining-s-p500/4837/3 "2020-12-02T14:58:02Z")
> [@Hello\_World](#):
>
> How large of a distortion do you think we may expect in ETF’s like VTI?
VTI today already consists out of 0.88% in Tesla. see [Vanguard Mutual Fund Profile | Vanguard](https://investor.vanguard.com/etf/profile/portfolio/VTI/portfolio-holdings)
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### Author:  [@Hello\_World](https://forum.mustachianpost.com/u/Hello_World)
#### Post date: [December 2, 2020, 2:58pm UTC](https://forum.mustachianpost.com/t/consequences-on-etfs-with-tesla-joining-s-p500/4837/4 "2020-12-02T14:58:07Z")
Yet Tesla is included in it’s holdings, does a large purchase of these shares not make any difference?
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### Author:  [@Gesk](https://forum.mustachianpost.com/u/Gesk)
#### Post date: [December 2, 2020, 3:11pm UTC](https://forum.mustachianpost.com/t/consequences-on-etfs-with-tesla-joining-s-p500/4837/5 "2020-12-02T15:11:32Z")
The point is it does not need to be bought “more” in vti because it is already held in it at market size.
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### Author:  [@nabalzbhf](https://forum.mustachianpost.com/u/nabalzbhf)
#### Post date: [December 2, 2020, 3:17pm UTC](https://forum.mustachianpost.com/t/consequences-on-etfs-with-tesla-joining-s-p500/4837/6 "2020-12-02T15:17:12Z")
If you think it makes a difference, there are way more lucrative ways to benefit from it than divesting/reinvesting from your index ETFs 🙂
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### Author:  [@mabi](https://forum.mustachianpost.com/u/mabi)
#### Post date: [December 2, 2020, 8:00pm UTC](https://forum.mustachianpost.com/t/consequences-on-etfs-with-tesla-joining-s-p500/4837/7 "2020-12-02T20:00:34Z")
> [@Hello\_World](#):
>
> How large of a distortion do you think we may expect in ETF’s like VTI?
I guess you mean here VUSA?
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### Author:  [@Cortana](https://forum.mustachianpost.com/u/Cortana)
#### Post date: [December 2, 2020, 9:22pm UTC](https://forum.mustachianpost.com/t/consequences-on-etfs-with-tesla-joining-s-p500/4837/8 "2020-12-02T21:22:55Z")
Tesla is at 0.5T market cap, that’s 2% the SP500. Nothing major will happen. Index funds will start including it on different dates. Some might add it already now, some later in January.
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### Author:  [@wapiti](https://forum.mustachianpost.com/u/wapiti)
#### Post date: [December 2, 2020, 9:51pm UTC](https://forum.mustachianpost.com/t/consequences-on-etfs-with-tesla-joining-s-p500/4837/9 "2020-12-02T21:51:03Z")
For sure, the inclusion will increase the price of TESLA stock even more. But no impact on VTI
The S&P500 is tracked by $4590 billion, so 2% is 91.8 billion. Theoretically, it will increase the market cap by 91.8 billion (currently 539 billion). However, I don’t know how the effect will be seen on the total market cap or stock price
Source: [http://investorfactbook.spglobal.com/sp-dow-jones-indices/sp-dow-jones-indices-worlds-leading-provider-of-financial-market-indices/](http://investorfactbook.spglobal.com/sp-dow-jones-indices/sp-dow-jones-indices-worlds-leading-provider-of-financial-market-indices/)
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### Author:  [@xorfish](https://forum.mustachianpost.com/u/xorfish)
#### Post date: [December 2, 2020, 11:02pm UTC](https://forum.mustachianpost.com/t/consequences-on-etfs-with-tesla-joining-s-p500/4837/10 "2020-12-02T23:02:20Z")
Investors know that this is going to happen, so it won’t increase the price.
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### Author:  [@wapiti](https://forum.mustachianpost.com/u/wapiti)
#### Post date: [December 3, 2020, 7:55am UTC](https://forum.mustachianpost.com/t/consequences-on-etfs-with-tesla-joining-s-p500/4837/11 "2020-12-03T07:55:24Z")
Yes and no, due offer and demand if fewer investors sell than the funds buy, the stock price will increase and increase the market cap
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### Author:  [@Bojack](https://forum.mustachianpost.com/u/Bojack)
#### Post date: [December 3, 2020, 8:49am UTC](https://forum.mustachianpost.com/t/consequences-on-etfs-with-tesla-joining-s-p500/4837/12 "2020-12-03T08:49:46Z")
Whatever you think should happen, is already priced in. Into TSLA price & into the price of other companies. Pretty sure ETFs will prepare for it in advance. It’s not like they will all run and buy TSLA on 21 December.
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### Author:  [@Dr.PI](https://forum.mustachianpost.com/u/Dr.PI)
#### Post date: [April 9, 2025, 6:11am UTC](https://forum.mustachianpost.com/t/consequences-on-etfs-with-tesla-joining-s-p500/4837/13 "2025-04-09T06:11:30Z")