Tag Archives: U.S. equities
The S&P 500 and DJIA: Divergent Paths to Similar Results
The S&P 500® and the Dow Jones Industrial Average® (DJIA) are two of the best known and most used indices in the world. They are both designed to represent U.S. large-cap companies. As we detailed in a recent paper, the S&P 500 and DJIA have similar long-term risk/return profiles. As of April 30, 2021, the…
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Sizing Up Style Returns
After more than a decade of underperformance, and in stark contrast to Growth’s dominance for much of 2020, Value has made an impressive comeback so far in 2021, outperforming Growth around the world, including across the size spectrum in the U.S. In fact, Value’s YTD outperformance against Growth in mid and small caps is the…
The Potential Value of U.S. Equity Allocation to Chinese Investors
The Chinese financial market has continued to evolve and mature over the past decade. More and more domestic Chinese investors are starting to take note of investment opportunities from global markets. What are the potential benefits of allocating globally for Chinese investors? In this blog, we will use the CSI 300 Index as a proxy…
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What Canada Is Missing
Canadian investors have long participated in U.S. equity markets, but are materially underweight in U.S. mid- and small-cap companies. In this respect, Canadians resemble their European counterparts, whose investments in the U.S. rarely range beyond those companies included in the S&P 500®. This underinvestment is surprising for several reasons. European market participants are no stranger…
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Something New with Something Old: DIY DJIA®
The growth of index funds has, in the main, helped to lower the costs and improve the performance of the average investor’s portfolio. Now, some are seeking to improve upon even the relatively low costs of conventional index funds via so-called “direct indexing”, by which investors purchase securities to match an index themselves, disintermediating the…
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How Now The Dow?
The Dow Jones Industrial Average® (DJIA) will celebrate its quasquicentennial on Wednesday, which marks exactly 125 years since the index’s first publication. Before one of the world’s most watched and widely cited benchmarks hits this milestone, here is an overview of “The Dow®,” including its origins, what has stayed the same over the years, and…
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Hidden in Plain Sight
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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Opportunity Does Not Equal Attainment
We’ve previously argued that most managers should prefer above-average correlation, because the incremental volatility a manager accepts to pursue an active strategy will be lower when correlations are high. In addition, active managers should prefer above-average dispersion, because stock selection skill is worth more when dispersion is high. Both correlation and dispersion rose in 2020….
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Exploring Equal Weight’s Impact on Risk/Return
What are the potential risk/return benefits of the S&P 500 Equal Weight Index? S&P DJI’s Hamish Preston and Tim Edwards explore what’s driving the mega-cap trend, multi-decade highs in S&P 500 concentration, and potential applications for the S&P 500 EWI.
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Risk-Adjusted SPIVA Year-End 2020 Scorecard: No Evidence to Support Superior Risk Management Skills of Active Managers
Modern Portfolio Theory tells us that higher returns tend to be associated with higher risk. Active managers tend to boast about their risk management skills and claim that they can generate higher returns than passive funds on a risk-adjusted basis. The Risk-Adjusted SPIVA® Scorecard assesses the risk-adjusted returns of actively managed funds against their benchmarks…
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