Sep 24, 2020

China A-Share Inclusion – An Update One Year Later

As we mark the one-year anniversary of the initial inclusion of China A-shares in S&P DJI’s global benchmarks, it seems an opportune time to provide an update on key developments relating to A-share inclusion and to examine the impact that A-shares have had on the composition and performance of the S&P Emerging BMI over the…

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Sep 23, 2020

Profitability, Liquidity, and Investability: The Key Drivers of Long-Term Outperformance of S&P SmallCap 600® versus Russell 2000

The S&P 600TM has outperformed the Russell 2000 since its launch in 1994. From Dec. 31, 1994, to Aug. 30, 2020, the S&P SmallCap 600 had an annualized return of 11.77% (with an annualized volatility of 18.96%) versus the Russell 2000’s annualized return of 10.49% (with an annualized volatility of 19.70%). The historical performance divergence…

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Sep 22, 2020

A Practical Look at How Risk is Shifting in Sectors

How can the relationship between sectors and factors help investors identify market regime changes and inform allocations? S&P DJI’s Anu Ganti and Hamish Preston take a closer look at market trends through the lens of S&P Composite 1500® data.     Learn more: https://www.spglobal.com/spdji/en/research/article/the-sp-composite-1500-an-efficient-measure-of-the-us-equity-market/

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Sep 21, 2020

Sectors and Electors

Markets expect elevated volatility surrounding the U.S. Presidential election, now just six weeks away. The VIX futures curve currently peaks in November, but as long ago as April a close observer could detect expectations of electoral volatility. Increased volatility may create an unusual opportunity for sector allocators. To understand why, we need to remember that…

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Sep 21, 2020

Examining Small-Cap Growth Strategies in Australia

Many market participants invest in small-cap equities seeking high-growth potential and portfolio diversification. In this blog, we will examine how growth factors performed in Australian small-cap equities by measuring the hypothetical top-quintile portfolio returns for three growth factors with long- and short-lookback periods, including 12- and 6-month price momentum, 3- and 1-year earnings growth, and…

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Sep 18, 2020

Holding Steady…

The market has recovered most of the losses from March’s uproar, with the S&P/TSX Composite Index down 4.8% in 2020 through Sept. 17. Volatility, though off its March peak, continues to be high but has been evenly distributed across all sectors of the market. Since all sectors experienced similar increases in volatility, it’s not surprising…

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Sep 17, 2020

What Would Emerging Markets Be Without China?

In the first decade of the 2000s, the U.S. and other developed countries fell behind emerging market equities by a wide margin, and they lagged China’s markets in particular: the S&P China BMI grew by 600% in the first decade of the new millennium. The 2010s saw a reversal of fortunes for broad-based emerging market…

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Sep 15, 2020

Courage vs. Comfort

Philosophers have long argued that courage is the most essential human virtue, because without courage, all other virtues lie in jeopardy. Remarkably, the theorizing of ethicists has an implication for practical portfolio management. We can illustrate this with a simple example in Exhibit 1. It’s Dec. 31, 1999, and a professional investor is considering buying…

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Sep 14, 2020

Not Your Father’s Tech Sector

As of the end of August 2020, the S&P 500® Information Technology sector had risen a remarkable 36% YTD. Such outstanding relative performance of course reminds us of the late 1990s, when the markets experienced a technology bubble and subsequent bust. One notable resemblance to the late 1990s is Information Technology’s weight in the S&P…

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Sep 10, 2020

Explore the Fast-Growing S&P Composite 1500 Internet & Direct Marketing Retail Index

Technological advancements and resulting social transformations have changed our daily lives. Traditional retailers have increased their usage of business channels such as the internet, mail order, and TV home shopping to attract their customers. The trend of this business transition has been reflected in the stock market. Among all the 68 industry indices in the…

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