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 across the S&P DJI product set, with particular focus on the active-passive debate, factor indices, and index dynamics. Craig previously served as product manager for S&P DJI’s 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.A wise man told me years ago that sometimes the things we see are less important than our way of seeing. As more formerly-active investors begin to use passive vehicles, it’s useful to consider if there’s a distinctly index-centric way of seeing, and what its elements might be. I think that there are at least Read more […]
Suppose that I buy a popular exchange traded fund (ETF) tracking the S&P 500® today, leave it in my brokerage account for 20 years, and then sell it. What return should I expect? The answer, obviously, is that my return should reflect the movements in the S&P 500 (net of fees) over my 20-year holding Read more […]
“You all did see that on the Lupercal I thrice presented him a kingly crown, Which he did thrice refuse.” Julius Caesar, Act 3 This morning’s Wall Street Journal declared that “Index Funds Are the New Kings of Wall Street.” The coronation, and similar notes of the “end of an era,” were prompted by Morningstar Read more […]
Readers of this morning’s Wall Street Journal learned (on the front page, no less) that many of the largest investors in the U.S. equity market hold similar portfolios. “The overlap in the top 50 stockholdings between mutual funds and hedge funds…now stands at near-record levels, a study by Bank of America Merrill Lynch found.” An Read more […]
Tomorrow, Warren Buffett and 30,000 of his closest friends will gather in Omaha for Berkshire Hathaway’s annual meeting. The loyalty of long-term Berkshire shareholders is the stuff of legend, as is the investment performance that produced it. $100 invested in Berkshire stock at the end of 1968 would have grown to more than $850,000 by Read more […]
Here is a 22-year history of a (hypothetical) actively-managed portfolio and its benchmark: Results have been decisively mediocre. The portfolio outperformed in only five years out of 22, for a hit rate of 22.7%. Its cumulative return (68.2%) lagged that of the benchmark (74.0%), and its volatility was higher (4.79% vs. 4.25%). The manager’s marketing department Read more […]
This morning brought a report that “retail investors have returned to Wall Street, pouring money into mutual funds focused on US equities for the first time since early 2015, according to data from TrimTabs Investment Research…. ‘Maybe people think, in times of higher volatility, active managers will do a better job,’ Winston Chua, an analyst Read more […]
Yesterday’s decline in the U.S. and global stock markets is striking not simply because of its magnitude but also because it represents a radical reversal of factor returns from the first three quarters of 2018. Readers of our quarterly factor dashboard will recognize this graph, which shows the total return of the S&P 500 and Read more […]
Suppose you, as a hypothetical financial advisor, encounter a hypothetical marketer who presents the following hypothetical performance data: Last Year Trailing 3 Years Trailing 5 Years Trailing 10 Years Portfolio 25.0% 11.9% 16.0% 8.8% Benchmark 21.8% 11.4% 15.8% 8.5% Not only did the portfolio beat its benchmark handily in 2017, says our marketer, but it Read more […]
Our colleagues at S&P Global Market Intelligence recently completed a paper analyzing the impact of exchange-traded funds on stock-level pricing. Their work found that “…the impact of ETF trading is transient and of only a modest magnitude under even extreme assumptions” (my italics). This conclusion is a rebuttal to critics who believe that the growth Read more […]