Despite the hovering cloud of geopolitical menace as we entered 2019, the U.S. equity market enjoyed an almost seamless rise through the first four months of the year. May’s retreat reacquainted investors with volatility and served as a reminder that the market is near all-time highs, having enjoyed a more or less sustained increase for Read more […]
After four consecutive months of gains by the S&P 500®, the U.S. equity market broadly declined in May. The S&P 500, S&P MidCap 400®, and S&P SmallCap 600® declined 6.6%, 8.1%, and 8.9%, respectively. The primary catalyst was the renewed trade tension between the U.S. and China, which reversed course from the optimism coming out Read more […]
This is more an eyewitness account than an analytical review of the growth of indexing since I joined S&P in 1982. At the beginning of 1982, few people saw indices as a business. There were only two well-known US indices – the S&P 500® and the Dow™ – and one index fund. Interest rates and Read more […]
The S&P 500® was up 3.93% in April, marking the fourth consecutive month of gains. The YTD gain of 17.51% was the best since 1987 and the fifth-best in the entire history of the index. The index set a new all-time high in April, surpassing the previous high close from Sept. 20, 2018. This completed 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 […]
The S&P 500 closed April 23, 2019, at a new record high. The index’s closing value of 2,933.68 is the highest since the 2,930.75 posted on Sept. 20, 2018. From that previous high, the benchmark declined 19.86% to 2,351.10 by Dec. 24, 2018, narrowly avoiding bear market territory. December 2018 was the second-worst December in Read more […]
Today we examine the impact of the members of the S&P 500 Dividend Aristocrats Class of 2019 on the index’s factor risk and sector composition. In our previous blog, we introduced these new constituents and discussed their quality ranking. Risk decomposition of the S&P 500 Dividend Aristocrats using Axioma’s US Fundamental Equity Risk Model MH4 Read more […]
When do sectors matter, and what can you do about it? Sometimes the sector composition of an equity portfolio strongly affects its returns. At other times, single stock effects or overall market effects dominate. Sector-based products such as ETFs and futures have been around for decades, but recently they have attracted growing interest. Exhibit 1 Read more […]
After the hottest January in 30 years, the broad market rally continued with 38 of 42 segments of the U.S. equity market positive in February (as of Feb. 28, 2019.) After the Fed said it could take a break from rate hikes and it would be flexible with its balance sheet, and the market rallied, Read more […]
