Effect of stock spilit on stocks grouped in ETF

When a company within an exchange-traded fund (ETF) undergoes a stock split, the ETF is adjusted to reflect this change without affecting the value of the ETF.

Stock Split Announcement: When a company announces a stock split, the total number of shares increases while the price per share decreases proportionally. For example, in a 2-for-1 split, each share splits into two, and the price per share is halved.

ETF Adjustments: The ETF will adjust its holdings to account for the increased number of shares and the reduced price per share. This adjustment ensures that the overall value of the ETF's holdings in that particular stock remains the same.

Proportional Allocation: Since the stock split does not change the total market value of the company, the value of the ETF's investment in that company also remains unchanged. The ETF’s number of shares in the company will increase, and the price per share of those holdings will decrease proportionally.

Impact on ETF Shares: The shares of the ETF itself are not split. The overall net asset value (NAV) of the ETF does not change because the underlying value of the investments remains the same after the stock split.

Ticker Symbols: The company’s stock and the ETF may have similar tickers, but a stock split in the company does not affect the ETF’s ticker. Both will continue to trade under their respective ticker symbols. The ETF's ticker symbol remains unchanged, and only the number of shares and share price of the underlying stock are adjusted.

In summary, a stock split in a company tracked by an ETF results in a proportional adjustment of the ETF’s holdings in that stock, ensuring that the value of the ETF remains consistent. The ticker symbols of both the company and the ETF remain unchanged