S&P removing Delta (DAL) from SP500 & SP100

Sniper · #1 08-15-2005, 06:35 PM

S&P REIT Composite constituent Public Storage Inc. (NYSE: PSA) will replace Delta Air Lines Inc. (NYSE: DAL) in the S&P 500. At the close of trading on August 15 Delta had a market capitalization of roughly $200 million, ranking 500th in the index. Caterpillar Inc. (NYSE: CAT) will replace Delta in the S&P 100.

BadBoyBenny · #2 08-15-2005, 11:21 PM

I wonder if it's a good strategy to buy the companies that are around 501-510 in market cap. Whenever anything gets added to the S&P all those index funds hvae to buy and it stands to reason that the price must go up accordingly.

Sniper · #3 08-15-2005, 11:45 PM

Being 501-510 doesn't add to the chance that the company will be the one added. Also most of those companies are already widely held in other indexes.

FishHooks · #4 08-15-2005, 11:48 PM

Some S&P index funds hold more than 500 stocks, I was looking at the vangard one, and they hold 506 stocks in their S&P 500 index fund.

TN_POKER_MAN · #5 08-18-2005, 07:59 AM

and some you guys didn't think the S&P Index is "actively" managed.

There is some value in non-index funds (if for no other reason, they've probably avoided airline stocks).

Jon34 · #6 08-20-2005, 10:08 PM

the fact that so many the index funds are forced to buy the newly added stock and sell the one that removed causes the selling/buying pressure that you would expect. As a result, trying to make money off of this is a game that has been around for a while. Enough hedge funds etc... have done this that the game is now more of trying to figure out who will be added/removed next. I doubt this is a strategy that is really feasible for the average investor.