there's a man named rob arnott, and he's good at picking stocks. he thinks that companies that were kicked out of big groups of companies (like the s&p 500) can actually do well in the future. so he made a special kind of investment (called an etf) to let other people invest in those companies. this new etf is called the deletions etf, and it might help people make money by investing in companies that were rejected by big groups of companies. Read from source...
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However, interesting points mentioned in the article, Rob Arnott launching Deletions ETF to invest in companies dropped from major indices, indicating that these "rejects" can yield 5% annual return over the next five years, long-term reversion to the mean.
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bullish
Just from the title itself - `'Godfather Of Smart Beta' To Launch Index For Companies That Didn't Make It To S&P500 And Russell 1000`, it is clear that the story is positive. The news of Rob Arnott, known as the “godfather of smart beta”, launching an ETF that invests in companies that have been dropped from major indices such as the S&P 500 and the Russell 1000 is a bullish indicator for investors. The ETF is based on the long-term reversion to the mean, and research indicates that companies removed from indices can rebound and generate future dividends, often outperforming their former indices. Furthermore, the outperformance of stocks dropped from major indices provides a promising backdrop for Arnott’s Deletions ETF. The ETF market has been experiencing significant growth, with a record-breaking number of new ETFs entering the market in 2024. The launch of Arnott’s ETF comes amid this surge in ETF popularity, making it a bullish story for investors.
1. Deletions ETF (NIXT) - Investing in companies that have been dropped from major indices such as the S&P 500 and Russell 1000. This ETF aims to benefit from the reversion to the mean, and historical data indicates that these "rejects" can yield a 5% annual return over the next five years. The risks associated with this ETF include the potential for lower growth prospects of the removed companies, and the possibility of the companies not regaining their position in the major indices. This ETF is suitable for investors looking for alternative and contrarian investment ideas.
2. BlackRock, T Rowe Price, Pimco, and Franklin Templeton launched ETFs - Following the declining market share of mutual funds, these high-profile investors launched ETFs. The trend is driven by the lower costs and popularity of ETFs. The risks associated with these ETFs include market volatility, concentration risk, and potential liquidity issues. These ETFs are suitable for investors looking for diversified and low-cost investment options.
3. Tesla Bull Ross Gerber Sets 6-Month Deadline For Elon Musk-Led EV Company To Improve Performance Or He Plans To Exit His Position: "See The Stock As Really Overvalued" - Ross Gerber, an influential Tesla bull, has set a 6-month deadline for the Elon Musk-led EV company to improve performance, or he plans to exit his position. Gerber believes that Tesla's stock is overvalued and could face significant pressure if the company fails to meet growth expectations. The risks associated with this investment idea include the potential for a decline in Tesla's stock price, regulatory risks, and increased competition in the EV market. This investment is suitable for investors willing to take on higher risks in pursuit of potential high returns.