NIXT: Betting On Index Deletions Won't Make You Rich
Source: SeekingAlpha
2025-04-07 22:56:41 ET
Summary
- NIXT selects stocks that were deleted from cap-weighted Indices similar to the S&P 500 and the Russell 1000. The basic concept is these stocks are oversold and will eventually outperform.
- The strategy is contrarian and inherently anti-momentum, which means investors must ignore other well-researched factor models that suggest momentum is a powerful factor.
- Furthermore, NIXT's fundamentals reveal its holdings were deleted for good reasons, such as negative profit margins and low-single-digit growth rates.
- I will also explain how NIXT's methodology isn't necessarily consistent with Research Affiliates' own research and highlight some shortcuts they've appeared to take to promote diversification.
- Overall, I don't think NIXT is a better product than other small/mid-cap funds like VBR, IJJ, AFSM, and USVM, so I've assigned it a "sell" rating.
Investment Thesis
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NIXT: Betting On Index Deletions Won't Make You Rich
Research Affiliates Deletions ETF
NASDAQ: NIXT
NIXT Trading
-3.21% G/L:
$27.565 Last:
1,453 Volume:
$27.58 Open:
