Category Archives: Equities

ETFs and William Shakespeare in 2014

“A rose by any other name would smell as sweet” Juliet says to Romeo when trying to illustrate it is the essence of a something which is important, not what it’s called.  If Shakespeare were alive today, and Juliet were an investor, would he have her say the same things about an ETF?  Would she Read more […]

The Dow Jones Industrial Average in 2013? Yeah, that went well…

A steadily improving economy and no small amount of performance-enhancing stimulus from the Fed re-enthused equity investors in 2013, leading the Dow Jones Industrial Average to finish in record territory. Let’s go to the tape: Impressive Climb – The DJIA finished the year at 16,576.66, up 3,472.52 or 26.50%.  That performance leaves us with the Read more […]

A Review of the Financial Markets in 2013

As part of its ongoing review of the financial markets in 2013, S&P Dow Jones Indices recently published four video interviews with senior index analysts that examine the drivers of market performance in 2013 and the news and events that could impact returns in 2014. Market segments discussed during these interviews include: the U.S. equity Read more […]

Two Dimensions of Risk

Investors have long regarded the market’s overall level of volatility as an indication of its riskiness.  The S&P 500 VIX Index, in particular, is often referred to as a “fear gauge” for U.S. equities since it tends to rise when investors are nervous and to fall when the markets are quiescent. Although S&P 500 VIX Read more […]

The Persistence of Non-Persistence

The phrase “past performance is not a guarantee of future results” has never rung more true for active mutual funds. Our semi-annual publication, the Persistence Scorecard, takes a look at the performance of top quartile active funds over three- and five-year consecutive 12-month periods. Based on the most recently released report, out of 265 large Read more […]

Indexing Beyond Large-caps: What happens to top performing funds?

At S&P Dow Jones Indices, our research indicates that indexing small-cap and mid-cap stocks works as well as it does for large-cap stocks, even though the large-cap segment may be more efficient than its junior siblings. Nevertheless, the popular belief that indexing works better for large-caps is well-entrenched and widely endorsed by advisors, consultants, and Read more […]

Inside the S&P 500: Multiple Share Classes and Voting

Google’s expected stock split has focused attention the treatment of multiple share classes in the S&P 500 and other indices. Most US companies, but not all, have only one class of common stock and each share is entitled to one vote.   In some companies with multiple share classes, one class is publicly traded and the Read more […]

Bond Funds Unbound

Yesterday’s Wall Street Journal offered a profile of fixed income investors who aim to “break [the] chains” by which they are supposedly confined by index benchmarks. As the bond market falters, investors are seeking shelter in funds that aren’t tied to indexes.  These bonds funds are known as “unconstrained,” “go-anywhere,” “absolute return” or “flexible” funds, Read more […]

Irrational Exuberance and Robert Shiller

Robert Shiller, Yale economist and author of Irrational Exuberance, who warned of 2000 Tech bust and the housing bubble is warning that equities may be a bubble. Year to date, the S&P 500 is up 26.7% and the Dow Industrials are up 22.4%, both before dividend reinvestment.

Coming Soon to a Dictionary Near You

It may have been 30 years ago, in the early days of stock index futures, that the verb “equitize” (and its cognate noun, “equitization“) came into relatively common use.  The term, if Dr. Johnson will forgive me, meant “to provide equity returns without purchasing equity securities.”  Typically this was accomplished by buying S&P 500 futures — if I Read more […]