With around 2,000 index ETFs available, investors can easily replicate the baskets of stocks used by mutual-fund managers as benchmarks. However, success may stem from unexpected factors rather than skill. In early 2021, value investors struggled, but those who held small-cap value funds saw impressive gains—not due to market timing, but because of meme-stock mania.
Game Stop and AMC Entertainment, two money-losing companies, briefly became the largest constituents of the Russell 2000 Value Index. This unusual shift caused the benchmark to outperform the S&P 500 significantly in the first quarter, highlighting how luck can play a role in investment outcomes.
Source: Wall Street Journal Markets · Summarized by HeadlinesBriefing