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Tag Archives: passive investing

Nov 28, 2023

Finding Fee Savings in Fixed Income

One of the benefits of indexing is its low cost relative to active management. As indexing has grown, investors have benefited substantially by saving on fees and avoiding active underperformance. These benefits are not limited just to equities but have also extended to other asset classes including the fixed income space, where fees can play…

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Jun 6, 2023

Active or Agnostic?

In order to generate value for his clients, an active investment manager must deviate from a passive benchmark—by choosing sectors, or styles, or individual stocks that the manager predicts will outperform. The manager’s value is dependent on the accuracy of his predictions; the better he is at identifying the best sectors, or styles, or stocks,…

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May 24, 2023

Persistently Disappointing

If you’ve ever read a prospectus (or, for that matter, an S&P DJI research report), you know that “past performance is no guarantee of future results.” At one level, if you understand that, you understand the most important thing about S&P DJI’s Persistence Scorecards. For the U.S., Europe, Latin America, and Canada (with Australia coming…

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Apr 3, 2023

Diversification and Performance: Potential Applications of U.S. Equities in Japan

The U.S. equity market is by far the largest in the world, representing 57.7% of the global market capitalization, and it is nearly nine times the size of the Japanese equity market (see Exhibit 1). Hence, Japanese investors may wish to consider U.S. equities in order to not overlook a significant portion of the global…

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Mar 28, 2023

What Drives S&P 500 Rebalance Turnover?

The S&P 500® undergoes quarterly updates—more colloquially known as rebalances—after the close of the third Friday in March, June, September and December. These updates typically affect the S&P 500’s composition and have turnover implications for investors tracking the index. For example, Exhibit 1 shows the S&P 500 turnover at each rebalance between March 1995 and…

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Feb 15, 2023

Active Performance Shortfalls and the Rise of Passive

Why did indexing take root and how has it grown so far so fast? S&P DJI’s Craig Lazzara and Anu Ganti take a closer look at why indexing works, the size of the passive market today, and the historical savings linked to indexing.

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Feb 9, 2023

Why Indexing Can Be Applied to Thematics

Index funds, which hardly existed 50 years ago, now play a prominent role in global financial markets. But passive investing does not dominate in every market segment. Recently, we have seen exponential growth in so-called “thematic” investing, with a proliferation of themes in areas like cybersecurity, robotics and electric vehicles. This more granular space is…

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Jan 11, 2023

A Spider Spins a SPIVA Special

Thirty years ago, Bill Clinton was getting ready for his inauguration as the 42nd U.S. president, the S&P 500® closed a little over 430 and the latest edition of Business Week was trumpeting that 1993 would be “The Year of Picking Wisely” in the stock market. Meanwhile, a different kind of security was about to…

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Jan 10, 2023

SPIVA and the Case for Indexing

What’s driving the rise of passive investing? Take a deep dive into the active vs. passive debate as S&P DJI’s Craig Lazzara explores what two decades of SPIVA has to say about why active has historically tended to underperform passive around the world.

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Jan 5, 2023

Indexing’s Evolution in Indian Markets

Indexing, also known as index-based or passive investing, has been slowly but steadily growing and transforming asset management and financial markets in India. For more than a decade, there has been a strong preference for actively managed funds among Indian investors, and understandably so as historically these were the only financial products that dominated the…

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