Indexing Multi-Asset Solutions

Multi-asset strategies have been traditionally offered via active management. Institutional and high net worth investors have used multi-asset strategies to meet their specific needs such as matching liabilities and achieving absolute returns. As the indexing industry evolves beyond asset class beta and systematic risk premia, we are starting to see multi-asset investment solutions offered in Read more […]

S&P 500 and Dow Jones Industrial Average

The two best known and most widely followed stock indices in the world are the S&P 500 and the Dow Jones Industrial Average.  While both follow large cap US stocks and both have long histories, they are quite different in some important ways. The Dow is the oldest regularly calculated stock index dating back to Read more […]

The Dog Days of Summer

Markets and investors both seem to be thinking about August vacations and little else these days. As we enter the second full week of August – or the third week before Labor Day for the pessimists and workaholics – things seem to be going quiet.  The Dell buyout, just about the only contested M&A action, Read more […]

The Fox and the Hedgehog

The ancient Greeks tell the story of the fox and the hedgehog.  The fox, it is said, knows many things, but the hedgehog knows one big thing. Anyone who reads the Wall Street Journal or listens to CNBC will recognize the vulpine nature of much of the financial world.  One key to investment success is Read more […]

Good Calls and Bad Calls of Covered Calls

Generally investors use covered calls to earn extra income from investments they think might not have much upside potential.  For example, if a CEO has a very large stock holding in his or her company but doubts the stock price will increase (or decrease much), writing (selling) options on the stock to collect a premium Read more […]

Inside the S&P 500: Dividends Reinvested

Slightly more than 400 of the 500 companies included in the S&P 500 pay dividends.  At the current rate, these dividends will be a bit over 2% of the value of the index.  In a strong market like the one enjoyed in the last 12 months when the index price rose over 20%, an extra Read more […]

SEC Takes a Troubling Step Back from Transparency

The Securities and Exchange Commission recently issued exemptive orders to three new exchange-traded funds – essentially granting approval to allow these funds to proceed to market – that dramatically liberalize the operations of “self-indexers”. Such firms not only manage the ETF, they (or an affiliated entity) also maintain the index on which that product is Read more […]

Inside the S&P 500: What Made it Rise… or Fall?

The first question asked as the market closes is why did it go up? Or, if the results were less appealing, why did it fall?  Either way the usual answer of more buyers than sellers is no answer at all.  The real question is what sectors pushed the market higher or which stocks sent it Read more […]

Index Rehab: Is Backwardation Back In-Style?

My colleague, David Blitzer, is discussing index construction in his blog series “Inside the S&P 500”, and so far has reviewed selecting stocks and the float adjustment. While the index construction principles of transparency, liquidity, and systematic rules-based methodologies are widely similar between equities, commodities and other asset classes, there are details that distinguish the asset Read more […]

Sell in May and go away. You’re sure?

We’re all familiar with that old adage.  The theory says that trading slows during the summer months, markets can be a bit more turbulent and you’re better off closing out your positions, getting to the beach and enjoying your Pimm’s Cup in relative peace. But as my colleague Craig Lazzara pointed in his recent post, Read more […]