Tag Archives: market efficiency
Green Pools: Evolving ESG Trading Ecosystems
Compared to the wide range of liquid, tradable instruments associated to more traditional benchmarks like the S&P 500®, the trading ecosystem of ESG-based investment products is still in its infancy. But, with the increased volume in listed futures linked to the S&P 500 ESG Index and S&P Europe 350® ESG Index, change is afoot. Of…
- Categories ESG
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2022, Canada FA, clean energy, climate, ecosystem, equities, ESG, ETF, ETFs, futures, IET, Index Investment Strategy, liquidity, Net Zero, Option, options, passive management, S&P 500, S&P 500 ESG Index, S&P DJI ESG, S&P Europe 350 ESG, S&P Europe 350 ESG Index, Sherifa Issifu, Trading, Trading Volumes, U.S., U.S. Equities, US FA, volumes
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- ESG
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- 2022, Canada FA, clean energy, climate, ecosystem, equities, ESG, ETF, ETFs, futures, IET, Index Investment Strategy, liquidity, Net Zero, Option, options, passive management, S&P 500, S&P 500 ESG Index, S&P DJI ESG, S&P Europe 350 ESG, S&P Europe 350 ESG Index, Sherifa Issifu, Trading, Trading Volumes, U.S., U.S. Equities, US FA, volumes
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…
- Categories Equities, S&P 500 & DJIA
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The Gift of a Benevolent Providence
Suppose that I buy a popular exchange traded fund (ETF) tracking the S&P 500® today, leave it in my brokerage account for 20 years, and then sell it. What return should I expect? The answer, obviously, is that my return should reflect the movements in the S&P 500 (net of fees) over my 20-year holding…
- Categories Equities, S&P 500 & DJIA
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Proximate Cause
Our colleagues at S&P Global Market Intelligence recently completed a paper analyzing the impact of exchange-traded funds on stock-level pricing. Their work found that “…the impact of ETF trading is transient and of only a modest magnitude under even extreme assumptions” (my italics). This conclusion is a rebuttal to critics who believe that the growth…
- Categories Equities, S&P 500 & DJIA
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Worse Than Marxism?
The investment community was bombarded last week with a paper arguing that passive investing is “worse than Marxism.” That any putatively-serious observer can compare an investment strategy, even one he doesn’t like, with a political ideology responsible for the deaths of millions boggles the imagination, but maybe I’m just too sensitive. The paper’s argument seems…