It wasn’t that long ago that indexes were used almost exclusively as performance benchmarks and barometers for stock market performance, most visible as a summary of recent activity on the evening news on in the business section of the morning paper. But over the past several years, the rise of indexing strategies and ETFs has transformed indexes into investable assets with hundreds of billions of dollars seeking to replicate these strategies.
As indexes have become more widely replicated, the indexing industry has evolved rapidly. Gone are the days when there were only a handful of benchmarks; there are now hundreds of thousands of indexes that slice and dice global stock markets in almost every conceivable way. Indexes that employ unique weighting methodologies as alternatives to market cap weighting have garnered significant attention in recent years, emerging as new tools for tapping into traditional asset classes. Meanwhile, index providers have also been busy fine tuning the rules behind indexes in an attempt to enhance the experience of investors with positions in products linked to these benchmarks [see also The Truth About Alternative Weighting Methodologies (And ETFs)]. [click to continue…]
Most risky asset classes have generally posted impressive three year performance figures at this point, delivering huge gains in the 36 months or so since equity markets bottomed out during the last financial crisis. Just about every equity index is well in positive territory for the latest three year stretch, thanks to improving economic fundamentals [...]
UBS, the issuer behind one of the broadest lineups of ETNs available to U.S. investors, continued the aggressive expansion of its product lineup this week with the introduction of two unique offerings. The company rolled out a pair of blunt instruments designed to be used in high level “risk on / risk off” trades, a [...]
Although many emerging markets still have excellent growth prospects, they have been hammered in recent weeks thanks to a ‘risk off’ trade in equities. Broad funds targeting this space, such as VWO or EEM, have fallen sharply in this time period, declining by nearly 16.8% in the past quarter alone. While this may sound bad, [...]
American equity markets had a day to remember during Monday’s trading session as major benchmarks plunged across the board thanks to Standard & Poor’s downgrade of U.S. sovereign debt. The ratings agency dethroned the world’s largest economy from its AAA rating one notch to AA+, causing a ripple effect throughout the market as investors reassessed [...]
This past week was one of the worst the markets have seen since the crash in 2008. Lawmakers in Washington came to a consensus regarding the debt-ceiling, voting to raise the limit on our nation’s already towering deficit. Investor sentiment was pessimistic nonetheless and equity markets sold off even after the debt-drama appeared to be [...]
Monday was yet another down day for Wall Street as stocks started the week in red territory given the anticipation surrounding the debt-ceiling negotiations. Even after lawmakers in Washington passed the debt-deal on Tuesday, equities still tanked in afternoon trading as investors went into a selling-frenzy. Persistent uncertainty and broad-based weakness continue to pave the [...]
Investors went along for a downhill ride last week as debt woes plagued Wall Street, sending the S&P 500 lower by nearly 4% for the week. Corporate earnings were mostly surprises to the upside, but equities failed to stage a meaningful comeback since investors were more concerned with the debt ceiling drama at home. As [...]
The past week saw a furious rally in equity markets across the globe, with the big run-up occurring at a time when many least suspected a bump. All eyes were on Greece to start the week, and concerns had been intensifying over undesirable developments in one of the most cash-strapped developed economies in the world. [...]
This week saw stocks go on one of their best winning streaks in recent memory as the S&P 500 gained close to 3.1% since the market opened on Monday. Most of these gains came as traders and investors alike bought up securities ahead of the Greek austerity measure decision on Wednesday, assuming that Athens would [...]
Although the Greek crisis tapered off to finish the week, plenty of risks remain in the overall economy, causing stocks to sink broadly across the board. Italian debt concerns are now coming to the forefront and more doom and gloom over the American economy– not to mention the debt ceiling– is continuing to plague equities [...]
