AMC Entertainment drama is exposing risks in $11 trillion world of indexing

The difference now is that investors have poured billions of dollars into products tracking smaller and cheaper stocks in the past six months

Index funds are supposed to cut out the human-driven craziness that periodically infects markets, but the recent meme-stock fever proved the $11 trillion industry is far from immune.
 
The remarkable surge in shares of AMC Entertainment Holdings and a handful of other stocks is showing up in multiple exchange-traded funds, skewing portfolios, altering risk profiles and exerting outsized influence on prices.
 
Take the $68 billion iShares Russell 2000 ETF (ticker IWM). In the past week through Thursday, AMC powered 70 per cent of the product’s advance. The stock was responsible for less than a 10th of the fund’s