October 2018 — Movements in the SMB Software Index
A recap of SMB Software Index performance for October 2018
After a strong summer performance led the SMB Software Index to an all-time high, the month of October was a tough one, during which the index lost nearly 15%, more than any other major index. In comparison, the S&P 500 lost nearly 7%, the Nasdaq lost 11%, and the Dow Jones lost 6%.
Drivers of Movement
The SCP SMB Software Index is weighted based on the market capitalization of the 35 companies that are included in the index. The market cap of the top 5 companies accounts for ~57% of the total market cap of all 35 companies and therefore the movement of these 5 companies influence the SMB Index as a whole.
Each of the Top 5 constituents of the index experienced losses during the month, led by Square losing 24.5% during the month. As seen above, though all comparative indices were down during the month, Square’s massive loss in market cap was partially driven by the news that Sarah Friar, the company’s longtime CFO, would be stepping down to become CEO of Nextdoor, a local social network for neighborhoods. Square’s stock fell 8% upon the announcement.
In comparison to Square, ADP, the largest constituent of the Index lost only 4.4% during the month.
The Top Gainers and Losers for October
Only 2 constituents saw gains for the month of October: Endurance and H&R Block. The biggest loser was Grubhub, which lost a whopping 32.5%, however, the other top losers were not far behind, each losing nearly a quarter or more of their market cap during the month.
Here’s how all constituents stacked up in the month of October
All but two constituents of the SCP SMB Software Index experienced losses in the month of October.
You can follow the SurePath SMB Index in real time at: http://www.surepathcapital.com/smb-index
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