SOMETHING TO WATCH: $SDY may be forced to sell 22% of Tanger Factory Outlet's (SKT) total shares outstanding in one shot at the end of the month in the ann reconstitution since the stock's market cap fell below the $1.5b eligibility req on the ref date.. 
How did one ETF get to own 22% of one company? Low rates attracted investors to the $20b ETF, which (this is key) weights by yield, giving Tanger's high yield an unusually large weighting for such a small stock. Mewnwhile, active players have been selling the stock bc Amazon.
This gets messier bc $SKT currently has a record 57% of its shares shorted rn. Is likely State State was caught by surprise a little and may have lent shares out it will have to call back soon in order to do reconstitution. Maybe they will buy SKT to minimize impact not sure tho
We've been watching Tanger for years since it is the stock with the highest % of index fund ownership (58%). This can help give us insight into how stocks may behave in future if passive devours more and more (altho to be clear most stocks are like 18%, SKT is CRAZY ABNORMAL).
FINALLY, if you have a terminal, read this and much more in our full report on Tanger and passive ownership: bloom.bg/2RgRCNn
Finally Part II: Before anyone gets too worried or histrionics-y about this (some will I’m sure), keep in mind this is wild outlier and small $-wise. $SDY’s 22% = $330m. Vanguard takes in more money than that every day bf lunch. #Context
THERE IS MORE: $SDY will also have to force-sell its 18% stake in Meredith Corp (MDP) at the end of month in ann recon. While Tanger was in the sub-$1.5b mkt cap range for a while, MDP dipped below (barely) right bf reference date. Bad timing. Nice chart showing it from @JSeyff
@JSeyff What's interesting is S&P saw this as a poss problem in future and issued a consultation on Aug. 13 seeking investor comments on reducing single-stock concentration risk, turnover during index rebalancing and deletion rules. But then opted to keep the rules as is.
@JSeyff The situation reminds us of $GDXJ, where a niche-y ETF that holds small-sized cos grew much bigger than the issuer prob thought it would. Like GDXJ, which broadened it's index as a result, my guess is S&P will add some thresholds and constraints to avoid a repeat.
