Tag Archives: capacity-adjusted dispersion
The Relative Value of Insights
Many investors use the start of the year to make predictions for the upcoming year and to think about ways to express views on these themes. This undertaking is not guaranteed to add value: predicting the future is incredibly difficult and success requires correctly predicting both the drivers of future performance and the upcoming impact…
Style Perspectives In Vogue
U.S. equities have had a tough start to the year amid rising inflation concerns, anticipated rate hikes by the Federal Reserve, earnings misses from several mega-cap companies, and ongoing geopolitical tensions emanating from the Russia-Ukraine conflict. Exhibit 1 shows that the S&P 500®, S&P MidCap 400®, and S&P SmallCap 600® all declined in the first…
- Categories Equities, S&P 500 & DJIA
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S&P 500 and the U.S. Presidential Election
2020 has certainly been an extremely unusual year as economies, companies and individuals have grappled with the impacts of COVID-19. Although this year’s market movements have arguably been even more difficult to predict than usual, and many active managers were wrong-footed earlier this year, investment outlooks have kept at least one eye on the outcome…
- Categories Equities, S&P 500 & DJIA
- Other Tags
Valuing Research: Three Questions
We recently introduced a new measure, capacity-adjusted dispersion, to help conceptualize the relative value of research across different markets. Intuitively, capacity-adjusted dispersion combines the potential opportunity for outperformance (dispersion) and the potential size of active positions (capitalization) in a given market. Exhibit 1 shows the capacity-adjusted figures for several markets, globally. All else being equal,…