Tag Archives: equities

Feb 23, 2021

Man Bites Dog: The Year for Active Management?

For at least five years, we’ve noticed that, despite historical performance, active managers regularly proclaim that this year will at last be the time when active management shows its value. I suspect that most advocates of indexing derive at least some guilty pleasure from observing this ritual. (I know I do.) So, we want to…

READ

Feb 3, 2021

Efficient Markets and Irrational Exuberance

Recent headlines have reflected the extraordinary behavior of GameStop Corp.; the company’s stock rose from $18.84 at year-end 2020 to $325 at the close on Jan. 29, 2021, then declined to $90 in the first two trading days of February. At year-end, GameStop was the 314th largest stock in the S&P SmallCap 600®. By the…

READ

Jan 20, 2021

Latin American Equities Close the Year in the Red Despite the Strongest Q4 in 20 Years

Volatility is often the name of the game in Latin America. While 2020 was no exception, global markets also rode the COVID-19 volatility wave (see Exhibit 1). The global pandemic exacerbated uncertainty around the world and all capital markets were affected, particularly during Q1 2020. In Exhibit 1, we can see that the S&P Latin…

READ

Jan 7, 2021

A Reversal, or Two

For many equity investors, the stand-out theme of last year was the reversal in the market’s initial response to, and recovery from, the COVID-19 pandemic: the dramatic price declines in March, the wild swings around the bottom as VIX® marked its highest closing level ever, and the just-as-dramatic recovery to new all-time highs by late…

READ

Jan 4, 2021

Persistence

Lyndon Baines Johnson became President of the United States at a moment of national trauma, and left office at a time of tremendous political division. Despite a landslide electoral victory in 1964 and notable legislative achievements, his was not a happy presidency. LBJ observed, in fact, that “being President is like being a jackass in…

READ

Dec 14, 2020

Core Considerations: Why Liquidity Matters

Learn how the liquidity and interconnectivity of the S&P 500 ecosystem benefits market participants. CME Group’s Tim McCourt and State Street Global Advisors’ Rob Forsyth join S&P DJI’s Craig Lazzara to discuss.   Learn more: https://www.spglobal.com/spdji/en/research/article/a-window-on-index-liquidity-volumes-linked-to-sp-dji-indices/

READ

Dec 9, 2020

The Distribution of Alpha

Investment management is a zero sum game. The source of outperformance for a market’s outperformers is the underperformance of the same market’s underperformers. Properly measured, the weighted average sum of the winners’ gains is exactly equal (before costs) to the weighted average sum of the losers’ losses. This identity, along with the professionalization of the…

READ

Dec 9, 2020

Why Building a Strong Core Starts with the Index

What does the S&P 500 liquidity ecosystem means for investors? S&P DJI’s Craig Lazzara and State Street Global Advisors’ Rob Forsyth take a closer look at the global reach of this U.S. icon. Learn more:  https://www.spglobal.com/spdji/en/research/article/a-window-on-index-liquidity-volumes-linked-to-sp-dji-indices/

READ

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®…

READ

Dec 1, 2020

The Dangers of Extrapolation

The contrasts between the first 10 months of 2020 and the month of November were vivid. Consider: At the end of October, the year-to-date total return of the S&P 500® was barely positive (2.77%), but was well ahead of the returns of the S&P MidCap 400® (-6.63%) and the S&P SmallCap 600® (-13.06%). In November,…

READ


Sign up to receive Indexology® Blog email updates