Index re-balancing/front-running is a common strategy used by...

Index re-balancing/front-running is a common strategy used by hedge funds, mostly those using an Events strategy (i.e. M&A arb, stubs, etc...). It is likely that some or a lot of the US insto buying is from these types of funds.

Front-running is positioning ahead of inclusion or removal from an index. The strategy is premised on stocks rising into inclusions as real buying pressure emerges from index funds. Vice versa from stocks that are removed.

Index re-balancing is premised on post inclusion/removal drift. Statistical analysis demonstrates that stocks continue to show positive momentum months after index inclusion. Vice Versa for those that are removed.

Both are long short strategies. The drift is usually modest post inclusion as part of the market impact from index funds actually buying is absorbed by hedge funds that front run. The ongoing buying momentum generally comes from ongoing inflows into index products or from active managers who look to buy the stock once its in their universe (i.e. index aware active managers). The post inclusion influence can be more modest than one thinks so its not the kind of thing that would make DCN or any other stock in its position go up 25% in a few weeks or months for no reason (i.e. assuming it was the only marginal driver of the share price).