In 2019, U.S. equities posted double digit gains, with the S&P 500® returning 31.49%—its best year since 2013 and second-best in a decade. This continued strong performance highlights the potential difficulty of beating the S&P 500.[1] The question then arises: what strategy (if any) outperformed the S&P 500 in 2019? Our latest S&P 500 Factor Read more […]
A wise man told me years ago that sometimes the things we see are less important than our way of seeing. As more formerly-active investors begin to use passive vehicles, it’s useful to consider if there’s a distinctly index-centric way of seeing, and what its elements might be. I think that there are at least Read more […]
The core-satellite approach splits a portfolio into two parts: the main part, called the core, and a much smaller portion, called the satellite. The core generally consists of “boring” but steady long-term performance (often index funds tracking market portfolios), while the satellite can be anything that could complement the core with risk diversification, outperformance potential, Read more […]
The S&P/BMV Index Series combines the local market expertise of the Mexican Stock Exchange (the BMV) with the resources and reach of one of the most prominent independent global index providers, S&P Dow Jones Indices (S&P DJI). This productive collaboration officially began in May 2015 and adheres to international standards. The relationship also provides the Read more […]
Amid the turbulent markets of 2019, the S&P Economic Cycle Factor Rotator Index has been holding steady. The index rotates its allocation between four indices benchmarked to factors—momentum, value, quality, and low volatility—seeking to pick the relevant factor for each phase of the business cycle. The index uses a signal that is based off the Read more […]
Market participants generally expect risk/return profiles to be similar across broad market indices representing the same universe. However, indices’ risk/return characteristics can vary substantially. As of Aug. 31, 2019, the S&P SmallCap 600® returned 10.21% per year since year-end 1993, while the Russell 2000 returned 8.53%. So why is there a substantial risk/return gap between Read more […]
After examining the risk factor exposure of the S&P China A-Share Factor Indices in our previous blog, we further explore the sector bias and associated impact on index performance. Apart from the S&P China A-Share Enhanced Value Index, all the S&P China A-Share Factor Indices tended to underweight the Financials sector,[1] though other unique sector Read more […]
The first half of 2019 saw one of the biggest rallies in the domestic market; the S&P 500® rose 18.54% on a total return basis despite concerns of slow economic growth, a trade war, and a possible rate hike. During the same period, the S&P 500 Low Volatility Index surprised the market and rose even Read more […]
In our previous blog, we looked at the S&P Factor Indices’ ESG exposures, showing that factor exposures can have an influence on ESG scores. In this blog, we’ll discuss these scores at the sector level and see how implementing an ESG or carbon reduction strategy on poorer ESG-performing factor indices can help investors Read more […]
“Sustainable investing must go mainstream. Fortunately, the momentum is growing.” – Mark Carney Mark Carney’s statement underpins the sentiment of the investment community, where environmental, social, and governance (ESG) considerations have entered the forefront of investors’ priorities. Whether factor indices have ESG principles integrated or not, understanding a factor’s influence on ESG characteristics, Read more […]
