When do sectors matter, and what can you do about it? Sometimes the sector composition of an equity portfolio strongly affects its returns. At other times, single stock effects or overall market effects dominate. Sector-based products such as ETFs and futures have been around for decades, but recently they have attracted growing interest. Exhibit 1 Read more […]
The S&P U.S. High Yield Low Volatility Corporate Bond Index (the HYLV index) was launched on Dec. 20, 2016, with the aim of capturing high yield bonds with less credit risk and lower return volatility than the broad investment universe of U.S. high yield bonds. One year after the index launch date, we present a Read more […]
For many plan participants, the goal of a retirement account is to provide a steady stream of income that will sustain their standard of living in retirement. Therefore, participants need a framework that aligns the management of their savings with their retirement income goal. This framework has three related components: Risk management that addresses the Read more […]
Now, there has been a long bull market where stocks have outperformed commodities for eight consecutive years, ending in 2015. It’s a record. If markets behaved just as they have in the past, then some investors might say it’s time to switch asset classes. However, the high correlation between risky assets experienced recently like during the Read more […]
It has been the worst start in history for both stocks and commodities, and while rare, it is no accident. Fundamentally, this environment is the worst ever. It is like the demand crisis of 2008-9 combined with the supply war of 1985-6 – WITH a strong dollar. The oil drop from the peak in June 2014 is Read more […]
Between Christmas and New Year, the familiar roar of events turns staccato and the market is gently buffeted by meager trading volumes; the relentless pursuit of profit that agitates the flight of global capital is sedated. The books are largely closed; the offices of major financial institutions are staffed by fragile acolytes bereft of their titans. Decisions, if Read more […]
The S&P Dow Jones Indices Financial Advisor Channel has followed the progress of Exchange Traded Fund (ETF) Strategists with interest for over four years. In fact, we have developed close working relationships with many of those firms. They are often champions of indexing; power-users of ETF use in portfolio management. Whether one tracks ETF strategists Read more […]
Volatility can feel like an earthquake. As many investors can painfully testify, the chart below is typical of volatility. A period of relative calm is disturbed first by a few small tremors, then by a precipitous rise. At this point, risk breaks all connections with its normal level and climbs rapidly to a crystalized zenith Read more […]
