Category Archives: Equities

SPIVA Europe Mid-Year 2017 Scorecard: Active Versus Passive – Consistency Is Key

It’s that time of the year and the highly anticipated SPIVA Europe Mid-Year 2017 Scorecard is out.  European active fund managers are no doubt apprehensively looking to see how their industry is competing with the performance of their respective S&P DJI benchmark indices. At first glance, active proponents may breathe a sigh of relief for Read more […]

The Best Investment Advice Ever

This weekend’s Financial Times brought John Authers’ provocative article on the frequency of financial crises.  Along the way, John gives us some excellent advice: “We should all work on the assumption that we do not know what will happen next.” John’s view of crisis prediction applies equally to the quotidian work of investment management.  Since we don’t Read more […]

Promoting ETFs – The CPSE Story

The recent announcement by the Indian Finance Minister about the new Central Public Sector Enterprise (CPSE) ETF created waves of excitement and anticipation in the market and among market participants.  In order to understand and dig deeper into what this new ETF means for the Indian markets, it would be good to understand the background Read more […]

Knowing Your Geographic Revenue Exposure: Lessons From Brexit

The so-called “Brexit” referendum result in the UK on June 23, 2016, came as a shock to financial markets, with the S&P United Kingdom LargeMidCap (GBP) falling by over 3% the following day.  As the political and economic outlook became uncertain, the British pound sterling had steep declines against other major currencies including the U.S. Read more […]

India Passive Story – The Government Catalyst

Passive investing in India has experienced a remarkable growth story, and the last few years have witnessed an exponential increase in both assets and products in the region.  India is among the leading countries in terms of the rate of growth of the exchange-traded fund (ETF) market, as assets have more than doubled in the Read more […]

Financials Gain More Prominence in Latest Low Vol Rebalance

Volatility has been generally subdued so far this year.  In the latest rebalance, the S&P 500® Low Volatility Index’s most significant sector shift was to Financials (adding 5% to bring the sector to 21% of the index).  Allocation in the remaining sectors did not deviate too far from the last rebalance. Technology’s weight, which increased Read more […]

Whether the Market Is Overvalued or Not, It Can Pay to Rebalance

Current valuations of U.S. stocks inevitably lead to debate over their prospects for future returns, earnings sustainability, and whether we are in the midst of a stock market bubble.  Some measures indicate the market is richly valued by historical standards, but no one knows what the future holds.  However, one thing is clear—the potential value Read more […]

Mutual Fund Portfolios: Equal Weight or Cap Weight?

Equal-weighted indices typically outperform their cap-weighted counterparts (although 2017 so far has proven to be an exception to the general rule).  This means that portfolio managers can usually create a performance tailwind by equal weighting rather than cap weighting their holdings. But do they?  One way to assess this question is by using the Herfindahl-Hirschman Read more […]

Bubbles and Housing

Home prices nationally are rising two to three times faster than inflation. They are up 5.5% from a year ago with some cities rising at double-digit rates. Looking at the chart of the S&P Corelogic Case-Shiller Home Price Indices, many are wondering if we’re in another housing bubble. While prices are rising, the following charts Read more […]

Australian Markets: Mid Caps a Sweet Spot for Investors

We have previously taken a dive into performance differences between Australian market cap segments and observed that mid caps offer a “sweet spot” for market participants.  Year-to-date, this message continues to resonate—the S&P/ASX MidCap 50 has returned 10.1% as of July 13, 2017.  Meanwhile, corresponding large-, small-, and broad market indices have returned measurably less Read more […]