Craig Lazzara

Managing Director and Global Head of Index Investment Strategy
S&P Dow Jones Indices
Biography

Craig Lazzara is Managing Director and Global Head of Index Investment Strategy for S&P Dow Jones Indices (S&P DJI). The index investment strategy team provides research and commentary on the entire S&P Dow Jones Indices’ product set, including U.S. and global equities, commodities, fixed income, and economic indices. Craig previously served as product manager for S&P Indices’ U.S. equity and real estate indices. These include the S&P 500 and the S&P CoreLogic Case-Shiller Home Price Indices, two of the most widely tracked benchmarks in the world.

Prior to joining S&P Indices in 2009, Craig was a managing director of Abacus Analytics, a quantitative consulting firm serving the brokerage and investment management communities. He previously directed marketing and client service for ETF Advisors and Salomon Smith Barney’s Global Equity Index Group, as well as for the Equity Portfolio Analysis group at Salomon Brothers. Earlier, Craig served as chief investment officer of Centurion Capital Management and Vantage Global Advisors, as a managing director of TSA Capital Management, and as a vice president and portfolio manager for Mellon Bank and T. Rowe Price Associates.

A Chartered Financial Analyst, Craig is a graduate of Princeton University and Harvard Business School.

Author Archives: Craig Lazzara

The Wrong Diagnosis

This morning’s Wall Street Journal described how “a $1.4 billion ETF gold rush” supposedly has disturbed the pricing of mining stocks around the world.  $1.4 billion turns out to be the incremental cash flow into a single exchange-traded fund designed to track an index of the gold mining industry, including some relatively small-capitalization companies.  These Read more […]

No News, and No Implications

This morning’s Wall Street Journal reported, rather breathlessly, that “U.S. bond yields are topping a key measure of the dividends that large U.S. companies pay—a shift that has broad implications for investors….”  The headline was triggered by the observation that the 2.50% “yield on the 10-year U.S. Treasury note…exceeded the 1.91% dividend yield on the Read more […]

Visualizing Factor Exposures

Measuring the away-from-benchmark exposures of active portfolios (or “smart beta” indices) is not inherently complicated.  To what degree, for example, is a portfolio cheaper than its benchmark, or more tilted toward high quality stocks?  Practitioners typically approach the question in one of several ways: Calculating weighted average differences – e.g., the yield on my portfolio is Read more […]

The Making of a Passivist

I have few memories of my school French, but one of the fondest is of Moliere’s Monsieur Jourdain, who was delighted to learn in middle age that he had been speaking prose for the last 40 years.  Similarly, I did not realize until recently that I was a “passivist,” as the Wall Street Journal has now anointed the Read more […]

The Worst of Both Worlds

For active managers, investment results are partly a function of skill and partly a function of the environment in which that skill is exercised.  Even perfect foresight has only conditional value.  Imagine, for example, a manager who can always identify the top quintile of performers in a given market.  If the top quintile outperforms the index as Read more […]

When Smart Beta Fails

How should an investor in a factor (or “smart beta”) index judge its performance?  In this respect at least, smart beta is like any other strategy: you should evaluate it against the claims that its vendors made before you bought it. This requires some subtlety.  Smart beta methodologies pick stocks based on fundamental or technical Read more […]

Worse Than Marxism?

The investment community was bombarded last week with a paper arguing that passive investing is “worse than Marxism.”  That any putatively-serious observer can compare an investment strategy, even one he doesn’t like, with a political ideology responsible for the deaths of millions boggles the imagination, but maybe I’m just too sensitive.  The paper’s argument seems Read more […]

The Consequences of Concentration: 5 – Genuine Skill?

Should active managers shift away from well-diversified portfolios and concentrate only on “high conviction” holdings in hope of generating higher returns?  We have suggested four consequences — higher risk, greater dominance of luck over skill, higher costs, and fewer outperforming funds — that are likely and logical outcomes of higher concentration.  All four apply even for active Read more […]

The Consequences of Concentration: 4 – More Underperformers

Can active managers improve performance by moving from relatively diversified to relatively concentrated portfolios?  Doing so is likely to increase risk, shift the relative importance of luck and skill, and raise trading costs.  A fourth consequence is that the probability of active underperformance is likely to increase. A simple example provides some insight.  Imagine a market with five Read more […]

The Consequences of Concentration: 3 – Higher Costs

Some active managers argue that the remedy for widespread active underperformance is more aggressive, more concentrated portfolios.  If this is the correct prescription, it has a number of adverse side effects — for example, risk is likely to increase, and the relative importance of skill and luck in decision making is likely to shift in luck’s favor. A Read more […]