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Stocks that did the best during the market’s surge from February 11th through April 20th have gotten slammed over the last few weeks. Below we have broken the S&P 1500 (which contains large-caps, mid-caps, and small-caps) into 10 groups (deciles) of 150 stocks each based on stock performance during the 2/11-4/20 market rally. Decile 1 marked as “Best” contains the 150 stocks that went up the most during the rally, while decile 10 marked as “Worst” contains the 150 stocks that went up the least during the rally. For each group, we show the average stock’s percentage change since the April 20th high.
As shown, the 150 stocks that surged the most during the rally are down an average of 4.9% since April 20th. That’s by far the worst performance of any decile. At the same time, the groups of stocks that went up the least during the market’s rally are outperforming, with deciles 8 and 9 actually averaging gains.
For anyone that got long stocks that were showing the most relative strength in mid-April, it has been a painful few weeks watching them get slaughtered. At the same time, the stocks that went nowhere during the market’s rally are all of a sudden heating up again. This type of rotation based on performance can be extremely tough on active investors, and it’s not going to help the already high percentage of funds out there that are underperforming their benchmarks.