Tag Archives: Index Investment Strategy

Low Volatility in Europe and Asia

“The rich, the poor, the high, the low Alike the various symptoms know”–The Influenza Winston Churchill, 1890 By this point, the infamous COVID-19 has made its way around the world and wreaked havoc through equity markets across the globe. We’ve already highlighted the value of protection in the U.S. and Canada.  Pandemics show no respect Read more […]

The Virtue of Protection

It remains to be seen what the full economic impact of the COVID-19 virus will be, but it is already clear that no equity market  has escaped unscathed.  (In fact, most of them have been scathed rather badly.) The Canadian equity market was humming along in 2020 through February 20, 2020, with the S&P/TSX Composite Read more […]

The Irrelevance of Value in Low Volatility

Low volatility strategies have achieved considerable market acceptance in the aftermath of the 2008 financial crisis.  For most of the 12 years since then, skeptics have argued that low vol might become, and sometimes that it has become, overvalued.  It’s an understandable concern, especially in light of the continuing popularity of low volatility strategies. We Read more […]

Protection and Participation

Through Feb. 20, 2020, the S&P 500 Low Volatility Index® is up 5.9% compared to a gain of 4.7% for the S&P 500. Equities roared out of the gate in 2020 but a hiccup in late January allowed Low Vol to catch up and eventually overtake the S&P 500. Those who are familiar with low Read more […]

From “Hard to Beat” to Nigh-On Impossible

Our SPIVA® reports have shown, year after year, that market-cap weighted benchmarks are, to put it kindly, hard to beat.  However, in 2019 a range of circumstances made “hard to beat” become nigh-on impossible for the S&P 500®. In general, there are three common ways by which an active portfolio can outperform its benchmark: over Read more […]

Emerging Markets: Enter the Dragon

The 2010s proved to be a disappointing decade for the S&P Emerging BMI, at least in relative terms. With a few weeks to go until the finish line, the index stands at a total return of 50% in U.S. dollars, compared with 160% for the S&P Developed BMI, as of Dec. 16, 2019. Although emerging Read more […]

Equity Markets React to the U.K. Election

At the General Election on Thursday, U.K. voters handed a resounding victory to Boris Johnson’s Conservative party.  The British electorate awarded the party with 365 out of 650 seats, the largest outright majority of any U.K. government since 2001, and the biggest victory for the Conservative party since Margaret Thatcher’s final victory in 1987. Exhibit Read more […]

Winning by Losing Less

Except for a couple of hiccups, the U.S. stock market has more or less hummed along in an upward trajectory for 2019. Through October, the S&P 500 is up 23%. What is surprising is that the S&P 500 Low Volatility Index® outperformed the benchmark by almost 3%, gaining 26% over the same period. This is Read more […]

Illustrating the Value of Liquidity

Let’s suppose for a moment that you are given a choice between two hypothetical exchange traded funds (ETFs) tracking the same index.  Fund A has an annual management fee of 0.4% while Fund B has an annual management fee of 0.1%.  At first glance, Fund B seems like the better option: it offers similar performance Read more […]

Mapping the S&P 500 Trading Ecosystem

A new paper published today provides a new perspective on the active usage of products linked to S&P DJI indices, and illustrates the network of liquidity that has developed around the S&P 500® and other popular benchmarks. “Active” and “passive” are colloquial terms, and it can be hard to distinguish one from the other at Read more […]