Stock migration drives size and value premiums, reshaping investment landscape.
Stocks that are small in size and have high value tend to perform better in the stock market. Small-cap stocks that earn high returns become big-cap stocks, driving the size premium. Value stocks see improvements when their companies are acquired or when they earn high returns and move to a different portfolio. Growth stocks with low returns shift to a different portfolio. Overall, value stocks that do not change portfolios tend to have slightly higher returns than growth stocks.