Latin American Scorecard: Q2 2018

Q2 2018 showed that volatility is king in Latin America. The first quarter saw strong returns for the region, with Mexico lagging. In the second quarter, we saw a practical wipeout of all gains for the year and a return to negative territory for Latin America. Recent presidential elections in Mexico and Colombia, as well Read more […]

The S&P 500 Equal Weight Index: A Supplementary Benchmark for Large-Cap Managers’ Performance – Part I

In January 2003, S&P Dow Jones Indices introduced the world’s first equal-weighted index, the S&P 500® Equal Weight Index, leading the way for the subsequent development of non-market-cap weighted indices.[1] Since then, it outperformed its market-cap-weighted counterpart, the S&P 500, in 16 out of 28 years, with an annualized excess return of 1.44% per year.[2] Read more […]

Setting Income Goals For A Winning Retirement

“You Keep Livin’, We’ll Keep Payin’” – lottery spokeswoman, Christy Calicchia.  Most people, while they only dream of winning a lottery, understand the concept between a big lump sum payout and an annuity that says something like “either win $1 million today or win $1,000 a week for life.”  Though the concept is clear, and in Read more […]

S&P Dow Jones Indices Quarterly Islamic Market Review

Most S&P and Dow Jones Islamic indices have outperformed conventional benchmarks through the first half of 2018 driven by underweight to financials. Most S&P and Dow Jones Shariah compliant benchmarks outperformed their conventional counterparts through the first half of 2018 as financials – which are largely absent from Islamic indices – lagged the market by Read more […]

The Importance of Sector Diversification in a Yield-Focused Strategy – Part I

Diversification is undoubtedly a central tenet of investing. Many studies[1] [2] [3] have shown that over the long-term investment horizon, maintaining a diversified portfolio can potentially reduce overall risk without compromising expected returns. As such, most market participants strive to form diversified portfolios in order to achieve their desired investment outcomes. There are many ways Read more […]

ESG Strategies on the Rise

Environmental, social, and governance (ESG) risks have taken a strong hold in the developed investing space. Previously, the concept had resided in the domain of “do gooders” and “tree huggers” seeking to make a better world. So what has changed so much that it is now taking root in mainstream investing? By and large, ESG Read more […]

One Big Problem In July For One Small Cap Index

Much attention has been drawn to small caps by top tier media since the small cap premium is now the biggest in eight years and the fifth biggest in history. The outperformance of the small cap stocks versus the large caps is being driven by the current economic environment of growth, rising interest rates, inflation and Read more […]

Leveraged Loans Over High-Yield Bonds

As of July 5, 2018, the S&P/LSTA U.S. Leveraged Loan 100 Index returned 2% YTD, compared with the S&P U.S. High Yield Corporate Bond Index’s return of -0.29%. In 2018, U.S. high-yield performance has experienced two rather sizeable negative returns—back-to-back declines in February (-1.05%) and March (-0.45%)—followed by a turnaround in April (see Exhibit 1). Read more […]

Risk-Adjusted SPIVA® Scorecard: The Evaluation of Active Managers’ Performance Through a Risk Lens

Evaluating active managers’ performance through a risk lens is rooted in modern portfolio theory (MPT), which states that the expectation of returns must be accompanied by risk—the variation (or volatility) around the expected return. MPT assumes that higher risk should be compensated, on average, by higher returns. Institutional investors tend to be interested in risk-adjusted Read more […]

Q2 Commodity Performance and the Notable Spread Between Brent and WTI Crude

The S&P GSCI was up 8.0% for the Q2 2018, with agriculture being the worst-performing sector in the index, and energy the best (see Exhibit 1). Of the 24 commodities tracked by the index, 14 finished the quarter on a positive note. Soybeans was the worst-performing commodity in the index, and Brent crude was the Read more […]