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MonarqiLabs / Glossary / Index rebalancing
Glossary

Index rebalancing

Index rebalancing is the scheduled review that changes which stocks an index holds. The IDX runs regular reviews of its LQ45 index, and MSCI runs quarterly index reviews that can add or remove Indonesian stocks or move them between its Standard and Small Cap segments.

rebalancing indeks

Why it matters

An index fund aims to replicate its benchmark's holdings and weights, so when a stock leaves an index, tracking funds would normally need to sell it, and when one joins, they would need to buy it. MSCI's 2026 decisions changed how this works for Indonesia. Its January freeze stopped increases in foreign inclusion factors and share numbers, blocked new additions and blocked upward moves from Small Cap to Standard. Deletions continued, including securities identified under the High Shareholding Concentration framework. Blocking additions cuts the buying side of a rebalance, while deletions keep the selling side.

Examples on the IDX

On 27 January 2026 MSCI froze increases in foreign inclusion factors and share numbers for Indonesian stocks and blocked new additions and upward size-segment moves (MSCI notice). The IDX's LQ45 rebalancing swapped Aspirasi Hidup Indonesia for Barito Renewables Energy from 2 February 2026 (Antara). In May 2026 MSCI removed a number of Indonesian companies from its indexes, according to Reuters reporting carried by Kontan. On 6 July 2026 MSCI said the freeze would still apply to the August review (MSCI).

Scenarios that use this term

MSCI Free-Float Freeze · MSCI Quarterly: Deletion Wave · MSCI Quarterly: Indonesian Additions

Sources

  1. Results of consultation on free float assessment of Indonesian securities, MSCI, 2026-01-27; accessed 2026-10-11.
  2. Update on the treatment of Indonesia and Turkey securities in the MSCI Global Investable Market Indexes, MSCI, 2026-07-06; accessed 2026-10-11.
  3. MSCI removes six companies from its Indonesian index in review, Kontan (English, citing Reuters), 2026-05-13; accessed 2026-10-11.
  4. Indonesian shares, rupiah tumble as MSCI removes six firms from index, New Straits Times, 2026-05-13; accessed 2026-10-11.
  5. BEI atur ulang indeks LQ45 berlaku efektif 2 Februari 2026, Antara News Jawa Timur, 2026-01-27; accessed 2026-10-11.
  6. IDX implements quarterly rebalancing for LQ45 index constituents, Kontan (English), 2024-04-01; accessed 2026-10-11.
  7. Mengapa reksadana indeks disebut investasi pasif?, Bareksa, 2020-06-23; accessed 2026-10-11.