Volatility, dispersion, and correlation are elements of what we’ve elsewhere characterized as The Active Manager’s Conundrum. Active managers should prefer: Low volatility, which is typically associated with higher returns High dispersion, which means a larger payoff for correct stock selections High correlation, which reduces the opportunity cost of a concentrated portfolio The conundrum arises because Read more […]
Why are the market environments most conducive to generating positive absolute returns the least conducive to producing positive relative returns? Explore the active manager’s conundrum with S&P DJI’s Craig Lazzara and Anu Ganti. Read more here: https://spdji.com/research/article/the-active-manager-s-conundrum
The evolution of indexing is one of the most noteworthy trends in modern financial history. The rise of passive investing is the consequence of shortfalls in active performance, as regular readers of our SPIVA reports will recognize. Our recent annual Survey of Indexed Assets shows a surge in S&P 500 indexed assets to $4.6 trillion Read more […]
Has the IT sector done well because of the quality factor, or is it the other way round? S&P DJI’s Anu Ganti takes a closer look at the relationship between sectors and factors to explore what’s driving IT’s climb over the past 12 months. Read the blog: https://www.indexologyblog.com/2020/05/27/symbiotic-sentiments/
Sectors and factors are different ways of viewing the world, but they are not mutually exclusive. We find an example of such a close, symbiotic relationship between the technology sector and the quality factor. Exhibit 1 shows that the S&P 500 Information Technology index has a strong tilt towards quality, while the biggest overweight in Read more […]
Do the S&P 500 High Yield Dividend Aristocrats provide durability during times of distress? S&P DJI’s Anu Ganti explains how dividend growers are positioned for the current climate. Learn more here https://www.indexologyblog.com/2020/04/30/durability-during-distress/
Dividends play a vital role in many investors’ approach to the market, although there is more than one way to approach dividends. Some investors are most concerned with dividend yield per se, while others are more sensitive to the growth of dividends over time. Both approaches, of course, can be readily indicized. Within the U.S. Read more […]
Income-seeking investors have always had to compromise between the level of dividend payments and the safety of dividend payments. The importance of this tradeoff has recently gone viral, as governmental actions in response to COVID-19 have suppressed global economic activity, causing many companies to suspend or reduce their dividend payments. Launched in 2005, the S&P Read more […]
Could higher dispersion in sectors and industries translate to outperformance? S&P DJI’s Anu Ganti explores how index data can be used to inform tactical sector rotation strategies in periods of high volatility. Get the latest sector dashboard: https://spdji.com/indexology/sectors/us-sector-dashboard.
Active funds generally lagged their passive benchmarks in 2019, but the market environment in 2020 has already shifted radically. Volatility has skyrocketed as the S&P 500® and other indices have fallen. Ironically, it is precisely in a time such as this, when absolute returns are hard to come by, that relative returns might be most Read more […]
