Category Archives: Strategy

Sustainability Indices: Investment Solutions For Future Generations

Ever since the launch of the first ethical investment fund by Friends Provident in 1984, socially responsible investing has continued to grow. Global assets under management reached EUR 13.6 trillion in 2012, and mutual fund assets in Europe increased by 19% over just two years, from EUR 199.9 billion in 2010 to EUR 237.9 billion Read more […]

Tomorrow’s FOMC Minutes: More of the Same or Hints of Higher Rates

Fed watchers will study the FOMC minutes for hints of the next interest rate move.  However, the most important data – the January employment report – was published more than a week after the FOMC meeting. That report showed strong job growth not just in January but over the last few months as data revisions Read more […]

Currency Wars: Pandering to Debase

So far this year, we have seen a ravenous interest from U.S. investors in currency-hedged equity exposure.  Currency risks have increased; currency volatility is on the up: The reasons behind these trends can be understood in part via the nature of human psychology and power, and the reality of politics. Consider yourself, for a brief Read more […]

Too Much Indexing?

Active management is difficult; most of its practitioners underperform passive indices most of the time; and 2014 was a particularly tough year.  Not surprisingly, active managers are not touting last year’s performance.  Instead, the pitch for active management increasingly cites its putative social benefits — arguing, e.g. that “Markets are efficient only because active managers buy underpriced Read more […]

Shelter from the Storm

Like many in the northern hemisphere, the S&P 500® felt a bit blue in January.  With the traditional winter frost came winds of volatility, which, like many of our holiday guests, overstayed their welcome.  On a total return basis, the S&P 500 declined 3% in January, as market volatility from the fall of 2014 lingered Read more […]

Home Price Bricks in Your Portfolio

In this post, we look at whether adding a home price index, as part of a multi-asset bundle, to a hypothetical portfolio could potentially improve its attributes. We created two portfolios, one comprised of equities and bonds (portfolio A), and a second that contained the elements of portfolio A plus commodities, home prices and infrastructure Read more […]

Ports in the Storm

Since last fall, the S&P 500 has gone through three distinct downdrafts.  Between September 18 and October 15, the index fell by 7.3%.   It recovered that lost ground, and then some, rising 11.8% through December 5.  Then a second, less severe, decline began, as the index fell 4.9% between December 5 and December 16, Read more […]

Fear of Fear Itself Reaches Crisis Levels

Franklin Delano Roosevelt would be disappointed. The US fear index, officially named the CBOE Volatility Index (VIX), has ticked up, averaging 16.4 since the beginning of Q4 2014, compared to 13.5 in the first three quarters of last year. If the story stopped there, we might still be able to look FDR in the eye. Read more […]

Inside the S&P 500: How Sector Weights Adjust for Oil

From May 30th 2014 to last Friday, January 9th, the energy sector in the S&P 500 was down 18.1% while the overall index was up 6.3%. As energy under-performs the overall index, its weight within the index is dropping, reducing the impact of further energy weakness on the index.  The energy sector weight is down by Read more […]

Don’t Worry About the Fed

Money is often described has having four functions: store of value, unit of account, medium of exchange and a source of anxiety.  Investors reading about the FOMC minutes published earlier this week are focused exclusively on the last function worrying about what will happen when the Fed raises interest rates.  A glance at the last Read more […]