Dale, re. Russell 2000 deletions, this excerpt of an article from www.tscn.com says that there are a lot of funds indexed to the Russell 2000, and that "Stocks being added to the Russell indices have outperformed those being deleted by 12 percent in each of the past three years."
here's the excerpts:
<<On June 12, Frank Russell Company of Tacoma, Washington unveiled its preliminary list of companies that will be added or deleted from its family of indices for this year. ...
... about $14 billion is tied to the Russell 2000 alone.
Even though the preliminary list (which is about 90 percent accurate) is already released to the public, index fund managers are not expected to make adjustments to their portfolios until July 1, the day Russell officially renews its indices. A twenty-dollar bill sitting on the sidewalk? Don't bet on it. Other fund managers are well-equipped to profit from buying early into companies that are expected to be added, and selling those that are suppose to be dumped. In fact, companies that are expected to join the Russell 2000 have already seen their share prices go up, notes David Cushing, director of research at ITG, Inc. in New York. True, newcomers have outperformed retirees of the Russell by 12 percent historically, but with so many stocks going in and out of the indices, it is not easy to pick the ones that are mostly like to make you a meaningful profit. By the time you separate the gems from the rocks, the hedge funds would have already done so and brought up the price of those stocks.
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