Tag Archives: S&P 500

Dividends and Buybacks: S&P 500® Buyback Index Outperforms

In general, it is a positive sign when a company buy back shares. This means the company believes its stock is undervalued and is confident about its future earnings. In recent years, buybacks have become increasingly popular. With a record number of companies buying back shares, how are these companies are faring? A company can Read more […]

Positioning for Market Volatility Using Passive Strategies

Fluctuating periods of “risk-on” and “risk-off” mean that spikes in equity market volatility and large drawdowns are increasingly common in today’s economy. Exhibit 1 shows events throughout the current market cycle causing notable rises in volatility and large drawdowns. With more of these likely in the future, as our long bull market cycle ages, how Read more […]

S&P 500® Has Best First Quarter in over 20 Years – But Upward Momentum Slows

The S&P 500 finished Q1 2019 up 13.07%. This was the best first quarter return since the 13.53% posted in Q1 1998. January’s 7.87% return was the best start to the year since 1987 (13.18%). The hot start cooled some with the 10th-best February since 1987, at 2.97%. In March, the upward momentum slowed further, Read more […]

New Additions to the S&P 500® Dividend Aristocrats® Class of 2019

The December 2018 rebalance of the S&P 500 Dividend Aristocrats added four new companies, with the changes effective at the open of Feb. 1, 2019. The new firms are Caterpillar Inc., Chubb Limited, People’s United Financial Inc., and United Technologies Corp. These four companies have the distinguishing characteristics that allow them to be eligible for Read more […]

The Height of the Hurdle

Indexing provides many rewards, including a reduction in volatility. Asset owners should demand higher returns to justify the volatility that active management entails. For managers who put their stock selection skills to the test, it is worth understanding the height of the volatility hurdle in managing a portfolio’s risk/return profile. We can illustrate this by Read more […]

2018 SPIVA® Scorecard: Volatility Does Not Help Active Performance

Contrary to the myth that active managers tend to fare better than their benchmarks during volatile markets, 68.83% of domestic equity funds lagged the S&P Composite 1500® during the one-year period ending Dec. 31, 2018, making 2018 the fourth-worst year for active U.S. equity managers since 2001 (see Exhibit 1). Evidence from the SPIVA U.S. Read more […]

When to Get Active with Sectors

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 […]

S&P 500 Posts 5th Best Start In First Two Months

After the hottest January in 30 years, the broad market rally continued with 38 of 42 segments of the U.S. equity market positive in February (as of Feb. 28, 2019.)  After the Fed said it could take a break from rate hikes and it would be flexible with its balance sheet, and the market rallied, Read more […]

Can All the Children be Above Average?

February has been a great month for factor index performance: of the 17 S&P 500®-based factor indices reported in our quarterly factor dashboard, 11 have outperformed the “vanilla” S&P 500 so far.  Our indices focused on quality and shareholder return are having particularly strong months, with the S&P 500 Dividend Aristocrats®, the S&P 500 Buyback Read more […]

Low Volatility Index Shows Its Utility

The S&P 500 Low Volatility Index® made a valiant comeback in late 2018 after trailing for most of the year.  The strategy index finished the year well by just staying in positive territory at a 0.27% gain, when the broader S&P 500 declined 4%.  It was also the best performing factor index among those based Read more […]