Tag Archives: Style
Rotating Between Growth and Value: The S&P 500® Growth Value Rotator Index
Growth and value are two investment styles based on fundamental analysis. A growth company typically has promising earnings potential and tends to invest more in future growth rather than dividend payouts, while a value company tends to be more established, with stable growth rates and dividend distributions. While most market participants are familiar with single-style…
- Other Tags
Using GARP Strategies for Indices Part III – Risk and Return
In this blog, the third in our introduction to Growth at a Reasonable Price (GARP) strategies, we look at risk and return. The main objective of the S&P 500® GARP Index is to capture the performance of growth stocks with relatively high quality and value composite scores over a long-term investment horizon. Historically, the GARP…
Using GARP Strategies for Indices Part II – Constituent Selection
In a previous blog, we took the first and second steps in our Growth at a Reasonable Price (GARP) strategy construction. We introduced the GARP investment strategy and showed how it can be implemented systematically. In this blog, we will take the third and fourth steps: using a multi-factor sequential filtering process for security selection…
- Other Tags
Using GARP Strategies for Indices
In this blog (and three subsequent posts) we will explore using Growth at a Reasonable Price (GARP) principles for investment in indices. GARP is a well-known, much-practiced, fundamental-driven investment strategy. It seeks to balance between the pure growth strategy and pure valuation strategy, as the former tends to chase high growth yet expensive stocks, while…
- Other Tags
Combining Value and Growth in a Pure Style Way
When it comes to style investing, pure style indices that select and weight securities based on their style scores tend to be less correlated with each other, have higher return spreads, and higher betas to the benchmark than the traditional market-cap-weighted style indices that have overlapping securities. Additionally, when one style is favored over the…
- Other Tags
S&P Pure Style Indices: Implications of Higher Return and Correlation Spread
The S&P Style Indices and S&P Pure Style Indices take distinct approaches in differentiating between value and growth factors. In past blogs,[1] we examined how differences in index construction can affect the performance of the indices in both series over a long-term investment horizon. In this blog, we examine how the suite of pure style…
- Other Tags
S&P 500 On Pace For Best January Since 1989
In the first seven trading days of 2019, the S&P 500 had its hottest start since 2003. That happened following the Fed’s message that it was in no hurry to raise interest rates. The Fed met again yesterday signaling it might end the interest rate increases, which pushed the S&P 500 up 1.55% for the day (Jan….
- Categories Equities, S&P 500 & DJIA
- Other Tags
- Categories
- Equities, S&P 500 & DJIA
- Other Tags
Style Designed For Performance
Style, the name for the value (growth) factor, is one of the oldest known investment factors. It can be defined in different ways, but in the S&P Composite 1500 that includes the S&P 500, S&P MidCap 400 and S&P SmallCap 600, style is measured by growth and value along two separate dimensions, with three factors used to…
- Categories Equities, Factors, S&P 500 & DJIA, Strategy
- Other Tags
An Unfair Fight: Value Managers Were Crushed
When I was in the U.S. Army, the doctrine for an attack specified a desired ratio of at least three of us versus every one of them. This would help to ensure an unfair fight. When your life is on the line, you want the odds in your favor. Why should that desire to tilt…
Pure Style Indices: A Finer Tool With Higher Style Focus
Style investing as an investment approach has long been utilized by market participants to group securities based on their common characteristics and risk/return drivers. Those common characteristics, in turn, help investors make strategic and tactical asset allocation decisions. The first-generation S&P U.S. Style Indices serve as effective underlying tools for market participants seeking a passive…