May 7, 2021

Comparing Small-Cap Indices in Developed and Emerging Markets

Not all small-cap indices are identical. Indices within the same market cap range can have varied performance in different markets. We studied the S&P Developed SmallCap and S&P Emerging SmallCap for their performance, volatility, and sector allocation in different market segments. The S&P Global SmallCap is a widely used benchmark representing the global small-cap market….

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Apr 5, 2021

Happy Birthday to Low Vol and High Beta!

On April 4, 2011, S&P DJI launched two strategy indices, the S&P 500® Low Volatility Index and the S&P 500 High Beta Index. Ten years of live history let us compare how the two indices actually performed versus their pre-launch back-tests. Many investors take back-tested history with an understandable grain of salt. But even live…

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Mar 22, 2021

Elevated Volatility Levels in Sectors Remain

The shock that the onset of the pandemic sent through the financial markets a year ago is mostly a distant memory. The S&P/TSX Composite Low Volatility Index was up 34% for the one-year period ending March 19, 2021, lagging its benchmark index. This is not surprising given that the performance of the S&P/TSX Composite Index…

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Mar 17, 2021

The Case for The S&P 500 GARP Index

The S&P 500® GARP (Growth at a Reasonable Price) Index just had its second anniversary since its launch in February 2019. During the latter half of this time, the world experienced the worst global pandemic in a century. Equities entered a swift V-shaped bear market and rebound. In this blog, we review the index’s performance,…

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Mar 8, 2021

A Change in Fortune

Three months ago, we observed that times of severe underperformance for Equal Weight can bode well for future performance. This reflection had become reality by the end of February. After almost four years of underperformance, the S&P 500® Equal Weight Index outperformed the S&P 500 by 1.6% over the past 12 months, as we see…

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Feb 19, 2021

Low Turnover in the S&P 500 Low Volatility Index Reflects Broader Market Dynamics

It’s been almost a year since the COVID-19 pandemic hit the U.S., but despite the disruption it brought to daily life, the U.S. equity market has performed remarkably well—rallying powerfully after a sharp decline in March 2020. Through Feb. 18, 2021, the S&P 500® was up 24% since the end of 2019. In the same…

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Jan 27, 2021

The Case for Equal Weight Indexing

2020 witnessed outperformance from some of the largest S&P 500® companies as investors expected these firms to be better placed to navigate the COVID-19 environment. Exhibit 1 shows that this outperformance led to the largest names accounting for an unusually high proportion of the U.S. large-cap equity benchmark, and therefore having a bigger impact on…

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Jan 26, 2021

A Different Kind of Bubble

Information Technology was the top-performing sector in 2020, up 44%, while Momentum (up 28%) was the second best-performing factor. These two results are reminiscent of the bubble we experienced two decades ago. But the Tech sector of today is not your father’s Tech sector. Similarly, we can analyze the market from a factor perspective and…

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Dec 8, 2020

Reversal or Recovery?

When we think about reversals in the market, we likely think of brief turnarounds in performance.  But what if it’s more? What makes a reversal turn into a recovery is a full-fledged long-term improvement in performance. We can apply this logic to Equal Weight’s recent experience.  After consistent underperformance since April 2017, the S&P 500®…

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Nov 20, 2020

The Market Is Up, But So Is Volatility

So far, 2020 has brought us a global pandemic, a coordinated global economic shutdown, and, in the U.S., a notably contentious election. So it’s no surprise that volatility has been, and remains, elevated. Despite all this, equities have fared reasonably (some would say surprisingly) well, with the S&P 500® climbing 13% through Nov. 19 since…

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