Category Archives: S&P 500 & DJIA

Historic Start for U.S. Equities Continues into the Start of May

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 […]

Buffetted Performance

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 […]

Performance Trickery, part 2

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 […]

S&P 500® Closes at New Record High

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 […]

S&P 500® Dividend Aristocrats®: Risk Decomposition and Sector Composition

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 to Get Active with Sectors

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 […]

S&P 500 Posts 5th Best Start In First Two Months

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 […]

Active Management for Volatile Times?

This morning brought a report that “retail investors have returned to Wall Street, pouring money into mutual funds focused on US equities for the first time since early 2015, according to data from TrimTabs Investment Research…. ‘Maybe people think, in times of higher volatility, active managers will do a better job,’ Winston Chua, an analyst Read more […]

As goes January, so … what?

“The more you look at ‘common knowledge’, the more you realise that it is more likely to be common than it is to be knowledge” – Idries Shah, Reflections Statements such as “sell in May and go away” can become accepted wisdom without always facing proper scrutiny.  Another aphorism, particularly timely at the present moment, is Read more […]

S&P 500 On Pace For Best January Since 1989

In the first seven trading days of 2019, the S&P 500 had its hottest start since 2003.  That happened following the Fed’s message that it was in no hurry to raise interest rates.  The Fed met again yesterday signaling it might end the interest rate increases, which pushed the S&P 500 up 1.55% for the day (Jan. Read more […]