Despite worsening liquidity conditions and market volatility, the gap in performance between highly liquid and less liquid stocks has held steady, according to an April 11 note by Goldman Sachs' chief U.S. equity strategist, David Kostin.
Typically, in turbulent markets, investors offload highly liquid stocks first, often leading to underperformance during broader selloffs. This time, however, Goldman's data shows the opposite. Kostin said the firm's high-liquidity portfolio has remained resilient, supported by strong fundamentals in its holdings.
The companies in Goldman's high-liquidity basket generally post solid earnings, maintain healthy balance sheets, and generate consistent returns on equity — all attributes that may have helped their valuations remain intact during recent volatility.
To monitor the trend, Goldman uses two 50-stock custom baskets from the Russell 1000 Index — one representing high liquidity ticker GSTHLLIQ, and the other tracking lower liquidity. The firm recently rebalanced both portfolios to adjust for market shifts.
Among the most liquid stocks, seven major technology names stand out: NVIDIA (NVDA, Financial), Apple (AAPL, Financial), Microsoft (MSFT, Financial), and Tesla (TSLA, Financial) each report a 0.1 illiquidity ratio, followed by Amazon (AMZN, Financial) and Meta Platforms (META, Financial) at 0.2, and Alphabet (GOOG, Financial) at 0.3.
