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.
Every year, it seems markets look to value investing to finally make a comeback. This year has been no different, as value has shown some signs of life amid early uncertainty.
It's Valentine's Day, and if Rob Arnott has it his way, we will all be celebrating the upside of getting dumped. The founder of Research Affiliates, one of the great minds in the world of index investing, has a flair for colorful language.
Research Affiliates Chairman and Founder Rob Arnott discusses how well the Deletions ETF (NIXT) has done after the US election outcome and says "it has done what it is intended to do, to participate when value is coming back from being out of favor." He speaks with Scarlet Fu, Katie Greifeld and Eric Balchunas on "ETF IQ.