2019 was a remarkable year for risky assets. All benchmarks tracked in the SPIVA U.S. Year-End 2019 Scorecard delivered positive returns. Information Technology-heavy and more internationally diversified companies of the S&P 500® pushed the index to its second- and fourth-highest annual return since 2001 and 1990, respectively. In addition, the S&P MidCap 400® (26.2%) and Read more […]
Growth and value are two investment styles based on fundamental analysis. A growth company typically has promising earnings potential and tends to invest more in future growth rather than dividend payouts, while a value company tends to be more established, with stable growth rates and dividend distributions. While most market participants are familiar with single-style 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 […]
When it comes to style investing, pure style indices that select and weight securities based on their style scores tend to be less correlated with each other, have higher return spreads, and higher betas to the benchmark than the traditional market-cap-weighted style indices that have overlapping securities. Additionally, when one style is favored over the Read more […]
The S&P Style Indices and S&P Pure Style Indices take distinct approaches in differentiating between value and growth factors. In past blogs,[1] we examined how differences in index construction can affect the performance of the indices in both series over a long-term investment horizon. In this blog, we examine how the suite of pure style Read more […]
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 […]
Style, the name for the value (growth) factor, is one of the oldest known investment factors. It can be defined in different ways, but in the S&P Composite 1500 that includes the S&P 500, S&P MidCap 400 and S&P SmallCap 600, style is measured by growth and value along two separate dimensions, with three factors used to Read more […]
When I was in the U.S. Army, the doctrine for an attack specified a desired ratio of at least three of us versus every one of them. This would help to ensure an unfair fight. When your life is on the line, you want the odds in your favor. Why should that desire to tilt Read more […]
Style investing as an investment approach has long been utilized by market participants to group securities based on their common characteristics and risk/return drivers. Those common characteristics, in turn, help investors make strategic and tactical asset allocation decisions. The first-generation S&P U.S. Style Indices serve as effective underlying tools for market participants seeking a passive Read more […]
We’ve previously observed that we can view the world through both a factor and a sector lens, but what about overlaying sectors and style? This is indeed possible, as sectors can serve as implementation vehicles to achieve a particular view on style. Using value and growth scores that are reset annually for every constituent within Read more […]
