Until sometime around 500 B.C., it was widely believed that the earth was flat. As such, explorers dared not venture too far, for fear of reaching—and ultimately falling off—the physical limits of the planet.
Most investors entered 2016 with optimism after a strong fourth quarter for the equity markets. However, investors were rudely greeted in January with heightened market volatility, largely driven by a sell off of the Chinese market and the continuing fall in the price of oil.
On New Year’s Day I decided to start out the year by cooking for friends and family, something I have rarely done since moving to New York. The main dish was an Ethiopian beef stew, which is very spicy and is served with couscous. No one would confuse it with an ordinary beef stew. And yet the nutritional ingredients of both stews are very similar. That got me to thinking about factors and fundamental indexes. (I know, get a life.) Stay with me though, because there is a striking parallel.
As global equity markets ride a roller coaster of volatility to start the new year, US stocks have turned down sharply, reflected by a nearly 9% decrease for the US large-cap Russell 1000® Index year-to-date as of January 21.
Index IDEA: Russell Stability Indexes Show Flight to Quality Amid Volatility
As global equity markets rode a roller coaster of volatility to start the new year, US stocks turned down sharply, reflected by an 8.2% decrease for the US large-cap Russell 1000® Index and an 11.3% decrease for the US small-cap Russell 2000® Index year-to-date as of January 15.
By: Catherine Yoshimoto, Senior Index Product Manager
The popularity of smart beta investments continues to grow, and despite recent market volatility and outflows during August and September, strategic beta ETFs identified by Morningstar experienced positive inflows of $86.8 billion over the 12 months ended October 2015, with total assets up 16% to $610 billion as of October 2015 compared to a year ago.
Index IDEA: European Small Caps Get Defensive; FTSE Russell
While the global equity markets began 2016 on a distinctly negative note, particularly for small cap stocks, further analysis by global index leader FTSE Russell indicates that European small cap stocks, particularly defensive-oriented European small cap stocks, have fared better than dynamic-oriented European small cap stocks and European large cap stocks over time.
Index IDEA: Small Cap Divergence, Market Returns & Volatility; FTSE Russell
With US stocks down sharply in the first five trading days of 2016, measured by an 8% fall for the US small cap Russell 2000® Index, global index provider FTSE Russell studied the relationship between small cap market return and volatility with the help of the Chicago Board Options Exchange.
Factor-based and alternatively-weighted indexes, generically called “smart beta indexes,” have transformed the current investment landscape. This impact now extends to the retail financial advisor audience according to a new FTSE Russell study, Smart Beta: 2015 Survey Findings from U.S. Financial Advisors. The findings indicate that advisors are increasingly incorporating smart beta into their client portfolios, but to appreciate how smart beta is penetrating the retail market, we need to look more closely at the profile of these advisors using smart beta.
FTSE Russell announces the launch of four new benchmarks within the Russell Global Indexes. The Russell Developed Large Cap 100% Hedged to CAD indices are designed for Canadian market participants and capture specific global sector exposures.
FTSE Russell is delighted to announce the launch of £SONET (Sterling Secured Overnight Executed Transactions) following an industry-wide initiative to create a new secured reference rate for sterling overnight funds, in response to the Financial Stability Board’s July 2014 recommendations on the reform of major interest rate benchmarks. £SONET has been developed by FTSE Russell and London Stock Exchange Group, in partnership with Euroclear and leading inter-dealer brokers.
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