International equity investors have long participated in the U.S. market, but their interest has often focused on the globally recognized blue chips included in benchmarks such as the Dow® and the S&P 500®. In doing so, they may be missing out on the long-term outperformance of smaller companies; presently, they may also be missing out…
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Three months ago, we observed that times of severe underperformance for Equal Weight can bode well for future performance. This reflection had become reality by the end of February. After almost four years of underperformance, the S&P 500® Equal Weight Index outperformed the S&P 500 by 1.6% over the past 12 months, as we see…
Most investors are familiar with the S&P 500 index. Its mid and small cap counterparts, the S&P 400 and S&P 600 don’t get quite the same coverage in the financial press. Yet these are powerful tools that must not be overlooked. 1. Diversification of the Indices 2020 was indeed a peculiar year for US equities….
The S&P 600TM has outperformed the Russell 2000 since its launch in 1994. From Dec. 31, 1994, to Aug. 30, 2020, the S&P SmallCap 600 had an annualized return of 11.77% (with an annualized volatility of 18.96%) versus the Russell 2000’s annualized return of 10.49% (with an annualized volatility of 19.70%). The historical performance divergence…
S&P DJI’s paper, A Tale of Two Benchmarks (first published in in 2009 and later updated in 2015 and 2019), showed that the S&P SmallCap 600® has structurally outperformed the Russell 2000, primarily benefiting from S&P DJI’s index inclusion criteria for profitability, liquidity, and public float. The paper also delves deeper into several secondary attribution…
After a volatile start to 2020, many investors were looking at double digit declines and were probably re-evaluating their 2020 expected returns. But while COVID-19 continued to determine market sentiment, Q2 hosted a remarkable recovery. The S&P 500 (+20.54%) and the S&P MidCap 400 (+24.07%) posted their highest quarterly total returns since 1998, while the…
The evolution of indexing is one of the most noteworthy trends in modern financial history. The rise of passive investing is the consequence of shortfalls in active performance, as regular readers of our SPIVA reports will recognize. Our recent annual Survey of Indexed Assets shows a surge in S&P 500 indexed assets to $4.6 trillion…
The emergence of COVID-19 caused sizeable recalibrations in financial markets as investors grappled with the anticipated impacts on people’s lives and on economic activity. Given many companies saw significant drops in market capitalizations amid the recent market sell-off, and in light of expectations for companies’ earnings to suffer from reduced economic activity, some may be…
The S&P 1500 serves as both a benchmark indicator for U.S. equity market performance and as a basis for passively replicating investment products that aim to deliver a “market” return. Our new paper examines the index from both these perspectives, and compares the S&P 1500 with other U.S. equity market indices. Here are a few…
How is COVID-19 relief impacting U.S. market segments? S&P DJI’s Gaurav Sinha takes a closer look at fixed income spreads, small- and mid-cap equities, and a potential role for the quality factor moving forward.
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