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Technology Stocks : SOTA A Leader in NT Financial Applications Software
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To: Jalali who wrote (2)6/29/1997 5:52:00 PM
From: Alan A. Hicks   of 21
 
There was an interesting article on the Russell 2000 reconstitution
in the May 19 Wall Street Journal, page C1. Some interesting facts.
There was a 14 percent peak spread between those added and deleted
last year. The peak spread was reached on June 27 last year with the
most change in the eight trading days before June 27. Most
interesting was that the article stated this spread was completely
reversed in the following 12 days.

Merrill Lynch, ITG, and Solomon Brothers publish a list in May of the
companies likely to be added or deleted so some investors are able
to act on it ahead of the changes. The problem for the index funds
is that they can't buy or sell too far ahead of time or wait after
the final date because it would throw off their performance from the
index. So they have to act in a fairly short amount of time.

Apparently it has been having a bigger impact every year since the
amount of money in these funds has been growing. There are almost $14
billion in index funds related to the Russell 2000. There are
between 300 and 500 companies added or deleted each year.

It will be interesting to see if SOTA gets a good bounce over the
next 12 trading days.

Jalali, I did find the Profiles. Nice feature of SI. Thank you for pointing
it out. I just E-mail the webmistress and SI might add a profile?
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