Trash or treasure? Dumped index stocks could be investing opportunity
Conventional wisdom in portfolio management suggests following the big indexes. But data and analysis shared in a recent webinar held by Research Affiliates, a Newport Beach, California-based investment firm, indicates that the stocks dumped, or deleted, from indexes could actually present opportunities for some investors.
In the Oct. 24 session hosted by Brent Leadbetter, partner and head of solutions distribution, Rob Arnott, founder and chairman of the firm, said Research Affiliates’ data shows that historically, these index deletions lag the market by more than half in the year leading up to their removal from an index. Still, they historically outperform the market for at least five years after the breakup.
In September,
