Click on "portfolio data" and skip down to the bottom section "Holding details". Skip to the last page (Page 11), and you'll see the smallest holding is EVRAZ plc, with 0.12%.
So effectively they have to sell a little bit of everything, to get around 0.12% of the fund into cash, so they can buy the new 100th company. The beauty of market cap weighted index's is that messing around at the edges is almost immaterial.
@kesh77 As the company value drops out will move down the ranking and tracking funds will reduce their holdings in it. Since this will drive the price down it is self reinforcing and the price may drop quite sharply as people lose confidence. By the time a company goes bankrupt it will probably have lost a lot of value so passive funds will probably not have a lot of exposure to it.
If the value dropped so fast that your fund was not able to sell out and still had significant holdings, the fund value would take a bit. The size of the hit would depend on what proportion of the fund that stock represented. If the fund is well diversified, it will not be a large percentage.
