Large mutual funds and passive index funds are starting to set aside more cash and preparing to offload some of their existing holdings in large-cap stocks, as they prepare to add upcoming blockbuster IPOs like SpaceX and OpenAI to their portfolios.
For passive funds, the potential inclusion of newly public companies could force them to sell down existing holdings in other large-cap stocks, said John Flood, managing director,Global Banking & Markets, FICC & Equities at Goldman Sachs, in a May 22 note to clients.
