Tag Archives: 2023
Connecting the S&P/ASX 200 to U.S. Equity Icons
Many market participants have a “home bias,” typically having larger exposures to domestic securities than would be determined by their representation in the global opportunity set. Australia is no exception: compared to Australia’s 2% weight in the S&P Global BMI, Australian investors allocated an estimated 49% of their total equity allocation to domestic stocks at…
- Categories Equities
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Disentangling Diversification
We frequently hear that “it’s a stock picker’s market.” The recent market environment could equally well be characterized as a sector picker’s market. To measure the importance of sectors, we decompose total market dispersion into within-sector and cross-sector effects. Exhibit 1 shows that the contribution of cross-sector effects to total S&P 500® dispersion has trended…
- Categories Equities, S&P 500 & DJIA
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S&P/ASX Small- and Mid-Cap Indices: Differentiators in a Large-Cap Dominated Market
Large-cap, Australian-listed companies have continued their robust 2022, outperforming the small- and mid-cap segments YTD as of April 30, 2023. However, a fast-changing economic environment may support considering small and mid-cap indices in Australia. The range of returns for Australian-listed companies in 2022 was among the widest seen in 20 years. Broad dispersion was exhibited…
- Categories Equities
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Potential Applications of U.S. Equities for Asia-Based Investors
Many investors have a so-called “home bias,” allocating to their domestic market in greater proportion than would be expected based on its representation in global equity markets. Asia-based investors are no exception. Here we present our U.S. equity icons as one potential way to provide diversification for Asian investors. The breadth and depth of the…
- Categories Equities
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Breakfast – The Most Important Meal of the Day
The first quarter of 2023 was a slow start to the year for commodities in general. The S&P GSCI Dynamic Roll Breakfast (OJ 5% Capped) also had a slow start, down 3.1%, after a solid 2022 performance of 14.12%. Maybe a higher weight to coffee would give the index the caffeine kick needed to boost…
- Categories Commodities
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An Israeli Home with a U.S. Twist
Our new research paper shows that Israeli investors have a greater home bias than other nations: they have invested more heavily in domestic equities and allocated to the U.S. in lower proportions than their developed markets peers such as the U.K., Europe and Canada. With U.S. equities making up nearly 60% of the S&P Global…
- Categories Equities
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SPIVA Japan Scorecard 2022: Active Underperformance Despite an Abundance of Opportunities
The inaugural S&P Indices versus Active (SPIVA®) U.S. Scorecard was published in 2002, and has since been extended to Australia, Canada, Europe, India, Japan, Latin America, South Africa and the Middle East & North Africa (MENA), allowing investors to experience the active versus passive debate on a global scale. The SPIVA Japan Scorecard measures the…
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Diversification and Performance: Potential Applications of U.S. Equities in Japan
The U.S. equity market is by far the largest in the world, representing 57.7% of the global market capitalization, and it is nearly nine times the size of the Japanese equity market (see Exhibit 1). Hence, Japanese investors may wish to consider U.S. equities in order to not overlook a significant portion of the global…
- Categories Equities
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Minor Impact to Headline S&P/ASX Indices from GICS Changes
Revisions to the Global Industry Classification Standard (GICS®) structure were implemented at the March S&P/ASX rebalance. The changes affect the GICS structure at all levels and involve a number of intra- and inter-sector changes for companies within the S&P/ASX 200 and S&P/ASX 300. Inter-sector changes are the reclassification of constituents to a different sector under…
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The Risk/Return Tradeoff: Results from the SPIVA South Africa Year-End 2022 Scorecard
The year 2022 was riddled with investment challenges worldwide, as fears of recession, rising inflation and geopolitical uncertainty ranked among a whirlwind of other market pressures. In South Africa, these risks manifested in two notably different halves of the year, with major equity and bond indices ending H1 in negative territory, but then rallying to…
- Categories Equities
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