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The week's question
In December 2024, in the thread "Re: BRK: Why Not XOM?", BreckHutHigh asked the members: "What about the long road trips with kids?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Investment Strategies / Mechanical Investing
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Author: JohnIII   😊 😞
Number: of 6131 
Subject: SP 600 Deletions Performance
Date: 06/08/24 9:11 PM
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This post examines the performance of stocks that were removed from the S&P 600 Small Cap index.

On 2023 June 02 (following market close) S&P announced a shuffling within indexes, including the S&P 600:

S&P Global: PDF document

Eighteen stocks were removed from the S&P 600 index. An equal weight basket of those stocks, purchased at market close 6/5/2023 through 6/7/2024, returned -13.56%. The tracking ETF VIOO returned 14.11%. So significant underperformance for the ex-index stocks. Here are the returns for the individual stocks:

CUTR -88.45%
PETS -70.42%
CMTL -80.02%
EGRX -80.44%
PLCE -34.62%
RYAM 56.47%
LPSN -81.35%
GCI 100.00%
BOOM -26.40%
GCO 42.59%
ZUMZ 38.38%
TREE 115.78%
TG -23.82%
INGN -13.69%
DOUG -56.86%
FARO 18.97%
CARA -80.25%
BIG -54.92%

Seems to fly in the face of studies that suggest outperformance of stocks that are removed from an index. Or maybe that only applies to mid/large cap indexes?

John
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