Category Archives: Equities

An Overview of India’s Market Today: Looking at S&P BSE Indices

The stock markets in India have performed phenomenally in the recent months.  The S&P BSE SENSEX (India’s most tracked bellwether index) has been scaling heights never seen before.  The one-year, risk-adjusted return of the index was approximately 3.53 as of August 29, 2014.  With 30 stocks, the index is well diversified across sectors.  It will Read more […]

Islamic Index Market Update: August 2014

Islamic Indices Outperforming Conventional Benchmarks in 2014 Shariah-compliant benchmarks have outperformed conventional indices in 2014 as Financials – which are underrepresented in Islamic indices – have experienced some weakness, and Information Technology, Health Care and Energy – which tend to be overweight in Islamic Indices – have been sector leaders. Through August 27, 2014, the Read more […]

Sell Just Before, Not After, the FOMC Meets

A recent academic paper (link here, full citation below) demonstrates that day-to-day stock market returns follow a regular bi-weekly cycle tied to the schedule of FOMC meetings, the Fed’s policy unit. A rolling five day return calculated as the excess return of stocks over T-bills peaks on the day the FOMC meets and then every Read more […]

Mid-caps: Neglected middle children of the equity universe…

“Middle Child Syndrome” is a psychological label for the empirical observation that middle children often do not receive as much parental attention as first and last-born siblings. But within the ashes of (relative) neglect may lay the seeds of a strong sense of independence, according to Catherine Salmon and Katrin Schumann in their book, “The Read more […]

Rotating Australian Cyclical and Defensive Sectors Over Global Economic Cycles

Rotating between cyclical and defensive stocks across economic cycles is a common approach for investors to take advantage of different economic phases. Energy, materials, industrials, consumer discretionary, financials and information technology are traditionally considered cyclical sectors, as stocks in these sectors have tended to be highly correlated to economic cycles. In contrast, consumer staples, healthcare, Read more […]

Could Price Momentum Predict Australian Sector Returns?

Sector allocation is one of the main pillars of equity portfolio management, and its use as a strategy to optimize investment allocations through sector rotation is increasingly abundant. In Australia, the equity market is diversified in sectors, and some of them can be traded through exchange-traded funds, making it possible to implement a rotation strategy. Read more […]

Inside the S&P 500: An Active Committee

The S&P 500 is maintained by a committee of market professionals.  We publish a detailed methodology document which includes guidelines for selecting stocks and other changes to the index.   Unlike many other S&P Dow Jones Indices and the majority of indices offered by other index providers,  there are no rigid or absolute rules for the Read more […]

Does active management work in Europe?

Academic arguments may well have “proven” the theoretical advantages of passive investing.  But theory is nothing without experiment; a comprehensive and impartial assessment of where and when active managers have delivered the promised “alpha” – or not – is a necessary and critical component of the debate. Our S&P Index Versus Active scorecard and associated Read more […]

Three Reasons to Consider Index Funds

Indexing is an investment approach which simply tracks an index to provide exposure to a market or segment of a market. For the three reasons listed below, it may be a viable complement or substitute to actively managed investments. Firstly, indices outperform the majority of actively managed funds. The SPIVA Australia Scorecard, which is published Read more […]

July 31st: More Sellers than Buyers

Stocks closed down today with the S&P 500 and the Dow Jones Industrials both down 1.8% despite yesterday’s stronger-than-expected GDP report, numerous earnings reports which beat Street expectations and no hints of early interest rate moves from the Fed.  Bearish or negative news stories weren’t much different from the day or week before – unrest Read more […]