Decoding Index Reviews: A Strategy to Get Ahead of Trillions of Dollars in ETF Capital Flows

In global financial markets, not all price movements are driven by news. Many sharp rallies and declines are actually caused by index rebalancing (Index Review) — a mandatory, transparent, and emotionless process embedded in index-based investing.

On a quarterly or annual basis, major indices such as S&P 500, Nasdaq 100, FTSE, and Nikkei 225 review and rebalance their constituents. When a stock is added to or removed from an index, ETFs and index funds managing trillions of dollars are required to buy or sell accordingly.
This forced capital flow creates short-term market inefficiencies — and that is precisely where opportunity emerges.

Index Review is not a random event. It follows a clear and structured process, including:

• Review period (quarterly, semi-annual, or annual)
• Announcement date of index changes
• Effective date, when funds must rebalance their portfolios

Empirical research and real-market data consistently show that:

• Stocks added to an index often experience temporary price and liquidity increases
• Stocks removed from an index frequently face short-term selling pressure
• Market reactions do not occur instantly — a time lag exists, allowing prepared investors to position ahead of the flow

BeQ Indexes Review Strategy Index (IRSI) was created to exploit this structural blind spot. Instead of chasing headlines or market sentiment, IRSI is built on index rules, quantitative data, and deep expertise in index design and governance.

The IRSI strategy rests on three core pillars:

• Early identification of stocks likely to be added to or removed from major indices
• Positioning ahead of mandatory capital flows from ETFs and index funds
• Capturing short-term price movements before, during, and after index review periods

The key differentiator of IRSI is its rule-based and repeatable approach — independent of emotional or discretionary market predictions.

Based on data updated through August 2025, IRSI has delivered strong and consistent outperformance relative to benchmarks:

• Year-to-Date (YTD): +62.37%
• Rolling 1-Year: +90.61%
• Rolling 3-Year: +71.30% per year
• Rolling 6-Year: +30.91% per year

Notably, IRSI has maintained stable excess returns versus the S&P 500 across multiple market cycles, demonstrating the sustainability of the strategy, rather than short-term luck.

IRSI is not a speculative or emotion-driven trading strategy. It is designed for investors who:

• Seek to understand the structural mechanics of global financial markets
• Value discipline, logic, and repeatability over short-term speculation
• Want to align with institutional capital flows, rather than react to them

With global index fund assets now exceeding USD 13 trillion and continuing to grow, understanding index mechanics means understanding the largest capital flows in the market.

Markets do not reward those who react the fastest — they reward those who position correctly before capital is forced to move.
IRSI represents a structural investment approach, where returns are generated by understanding and leading market rules, not by guessing outcomes.

👉 Read the full research paper and detailed factsheet of the BeQ Indexes Review Strategy Index (IRSI):
🔗 https://dashboardlite-be.ccpi.vn/storage/posts/BeQ_Indexes_Review_Indexes_68cd2579116d8.pdf

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