We're an investing service that also helps you keep your dough straight. We'll manage your retirement investments while teaching you all about your money. ---Ready to subscribe--- https://www.youtube.com/jazzwealth?sub_confirmation=1 For more information visit: www.JazzWealth.com --- Instagram @jazzWealth --- Facebook https://www.facebook.com/JazzWealth/ --- Twitter @jazzWealth Business Affairs 📧[email protected]
Views: 1355 Jazz Wealth Managers
They provide diversification and rebalancing benefits over cap-weighted ETFs, but come with higher fees and volatility, says Invesco Canada's Christopher Doll. Morningstar Guest: Christopher Doll - Vice President, ETF Sales and Strategy, Invesco Canada http://www.morningstar.ca
Views: 336 Morningstar Canada
The debate between market-cap, equal and fundamental indexing strategies has raged for years. Now, the data is in. In this webinar, IndexUniverse President of ETF Analytics & Global Head of Editorial Matt Hougan, examines the real-life performance of market-cap, equal and fundamental weightings strategies over the past five years and lays bare—with no spin—the potential risks and rewards of each approach. Investors will leave the webinar understanding where each of the strategies fits in tactical and strategic asset allocation programs, and how to choose among the different index strategies on the market today. Matt is joined by Anthony Davidow, Managing Director & Portfolio Strategist at Rydex|SGI and Christian Wagner, Chief Executive Officer and Chief Investment Officer at Longview Capital Management.
Views: 297 ETF.com
How does equally weighting sectors influence risk and return? S&P DJI's Shaun Wurzbach and Roger Scheffel of WST Capital Management delve into how advisors and asset managers use equal weight sector tools to discover potential opportunities.
Views: 833 S&P Dow Jones Indices Channel
David Koenig of Russell Investments on how fundamentally weighted indexes offer investors a way to diversify index-based exposures, and serve as useful complements to actively-managed and market-cap-weighted index strategies.
Views: 142 InvestmentNewsEvents
LOW COST FUNDS: Vanguard founder Jack Bogle says investors should stick to market-cap weighted passive funds - strategic beta will not outperform over the long term. Morningstar guest: John C. Bogle, Founder and former Chief Executive of Vanguard http://www.morningstar.co.uk -~-~~-~~~-~~-~- Please watch: "Should You Be Worried About the Economy?" https://www.youtube.com/watch?v=WUzqTPeI9IM -~-~~-~~~-~~-~-
Views: 5022 Morningstar UK
I frequently talk about Index Funds on Common Sense Investing. With the increasing popularity of index funds, index creation has become big business. There are sector index funds, smart beta index funds, equal weighted index funds, and many others, making it that much more challenging for investors to make sensible investment decisions. In today's episode of Common Sense Investing, I'm going to tell you why not all index funds are good investments. I’ll be talking about a lot more common sense investing topics in this series, so subscribe, and click the bell for updates. I’d also love to read your thoughts and questions about this video in the comments. My previous episodes on Index Funds: https://www.youtube.com/watch?v=FlpwTJJEasA&t=4s https://www.youtube.com/watch?v=GuJoojyOvMg&t=6s https://www.youtube.com/watch?v=ssuaVMbRtCo&t=104s https://www.youtube.com/watch?v=TodW2LEkowI&t=25s Other References: Canadian Couch Potato Model ETF portfolios: http://canadiancouchpotato.com/wp-content/uploads/2018/01/C The Cross-Section of Expected Stock Returns by Eugene Fama & Kenneth French: http://onlinelibrary.wiley.com/doi/10.1111/j.1540-6261.1992.tb04398.x/epdf On Persistence in Mutual Fund Performance by Mark Carhart: http://onlinelibrary.wiley.com/doi/10.1111/j.1540-6261.1997.tb03808.x/epdf The Other Side of Value by Robert Novy-Marx: http://rnm.simon.rochester.edu/research/OSoV.pdf iShares Multifactor ETFs by Justin Bender: https://www.pwlcapital.com/en/Advisor/Toronto/Toronto-Team/Blog/Justin-Bender/August-2016/New-Multifactor-ETFs-from-iShares Long Term Capital Budgeting by Yaron Levi and Ivo Welch: https://www.researchgate.net/publication/272304393_The_ABC_of_Long-Term_Capital_Budgeting ------------------ Visit PWL Capital: https://goo.gl/uPcXg7 Follow PWL Capital on: - Twitter: https://twitter.com/PWLCapital - Facebook: https://www.facebook.com/PWLCapital - LinkedIN: https://www.linkedin.com/company-beta/105673/ Follow Ben Felix on - Twitter: https://twitter.com/benjaminwfelix - LinkedIn: https://www.linkedin.com/in/benjaminwfelix/ ------------------ Video channel management, content strategy & production by Truly Inc. - Website: http://trulyinc.com - Twitter: https://twitter.com/trulyinc
Views: 13198 Ben Felix
There are two types of gold ETFs: those that invest in physical gold and those that invest in gold stocks. The new U.S. Global GO GOLD and Precious Metal Miners ETF (GOAU), launched June 28, falls in the latter category. Please consider carefully a fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a statutory and summary prospectus here: http://www.usglobaletfs.com/investor-materials/ or call 844.ETF.JETS (844.383.5387). Read it carefully before investing. Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the funds. Brokerage commissions will reduce returns. Because the funds concentrate their investments in specific industries, the funds may be subject to greater risks and fluctuations than a portfolio representing a broader range of industries. The funds are non-diversified, meaning they may concentrate more of their assets in a smaller number of issuers than diversified funds. The funds invest in foreign securities which involve greater volatility and political, economic and currency risks and differences in accounting methods. These risks are greater for investments in emerging markets. The funds may invest in the securities of smaller-capitalization companies, which may be more volatile than funds that invest in larger, more established companies. The performance of the funds may diverge from that of the index. Because the funds may employ a representative sampling strategy and may also invest in securities that are not included in the index, the funds may experience tracking error to a greater extent than funds that seek to replicate an index. The funds are not actively managed and may be affected by a general decline in market segments related to the index. Airline Companies may be adversely affected by a downturn in economic conditions that can result in decreased demand for air travel and may also be significantly affected by changes in fuel prices, labor relations and insurance costs. Gold, precious metals, and precious minerals funds may be susceptible to adverse economic, political or regulatory developments due to concentrating in a single theme. The prices of gold, precious metals, and precious minerals are subject to substantial price fluctuations over short periods of time and may be affected by unpredicted international monetary and political policies. We suggest investing no more than 5% to 10% of your portfolio in these sectors. Distributed by Quasar Distributors, LLC. U.S. Global Investors is the investment adviser to JETS and GOAU.
Views: 138 U.S. Global Investors, Inc.
VanEck Australia Director of Investments Russel Chesler explains the benefits of equal weighted ETFs, VanEck's track record and the markets where equal weighting can be expected to outperform.
Views: 41 VanEck Australia
Despite the volatile year, some ETF providers were well positioned to capitalize on the market turmoil and attract investors away from more established investment strategies in the ETF space. "2018, for us, was really an amazing year because it marked a year where we continued to expand our product lineup, and we did it the way we have always have. We've talked about how we've built it across equities, fixed-income, alternatives - the way you build a portfolio, but this year, what we also did was expand across disciplines, so not only factor based, which we've talked about, but also purely market-cap weighted beta and more purely active," Jillian DelSignore, Executive Director, Head of ETF Distribution, J.P. Morgan Asset Management, said at Inside ETFs. Specifically, the actively managed JPMorgan Ultra-Short Income ETF (JPST) has quickly garnered assets, with $6.2 billion in assets under management, and became a popular way to access the short-end of the yield curve. The ultra-short duration bond strategy leverages the expertise of J.P. Morgan’s Global Liquidity business. In a rising interest rate environment, investors are looking for a safe way to park their cash and reduce risk exposures, and with something like JPST, investors can utilize an innovative solution to build stronger portfolios.
Views: 68 ETF Trends
https://goo.gl/QPCkqk - Start earning with binary options like millions of traders do Competition is nothing new in the exchange-traded funds (ETFs) industry, and one of the most fertile territories for competition is fees. Fee cuts are the norm in the ETF business, and in a sign of the intensifying competitive landscape when it comes to attracting assets, some unique ETFs could start unveiling lower fees. Proving that fee cuts are not exclusively the territory of the largest issuers or cap-weighted funds, Guggenheim said Thursday it is reducing the annual fee on the Guggenheim S&P 500 Equal Weight ETF (RSP). RSP is one of the godfathers of the equal-weight ETF movement, a forerunner to the smart beta phenomenon. In a move that puts its annual fee well below the average for U.S. large-cap smart beta strategies, RSP's new annual fee is now 0.2%, a 50% reduction from the previous level. RSP's new expense ratio is the equivalent of $20 per year on a $10,000 investment. This significant fee reduction is designed to benefit existing shareholders and acknowledge the increasing use of RSP by institutional and individual investors as a core equity holding, said Douglas Mangini, Guggenheim senior managing director and head of intermediary distribution, in a statement. (See also: A Venerable Equal-Weight ETF.) Some equal-weight ETFs, including RSP, have long histories of outperforming their cap-weighted equivalents. That outperformance, critics assert, is often attributable to the equal-weight ETFs featuring more exposure to smaller stocks. Indeed, RSP does not shy away from its de-emphasis of large-cap stocks. The equal-weight approach was implemented to eliminate the large-cap bias of traditional capitalization-weighted index products, said Guggenheim. The resulting reduction in concentration risk, combined with a quarterly rebalance, has helped RSP consistently outperform the S&P 500 on a rolling monthly basis since the fund's 2003 inception. It is impossible to argue with RSP's results. On a rolling monthly basis over the past five years, RSP has outperformed the cap-weighted S&P 500 84% of the time. Over the past decade, that number jumps to 100% of the time, according to issuer data. (See also: Get Diversification the Easy Way With ETFs.) By equally weighting its holdings, RSP's sector profile differs from that of the traditional S&P 500. Whereas technology, healthcare and financial services are the three largest sector weights in the standard S&P 500, RSP's three largest sector allocations are consumer discretionary, industrials and financials. RSP is underweight technology stocks by almost 1,000 basis points relative to the cap-weighted S&P 500. With almost $13.5 billion in assets under management, RSP is one of the largest equal-weight ETFs. (See also: S&P 500 ETFs: Equal Weight vs. Market Weight.)
Views: 37 ETFs
The Diamond Hill Valuation-Weighted 500 ETF (DHVW) is a smart alternative to classic S&P 500 funds because it is forward-looking and focuses on intrinsic value, said Ric Dillon, CEO of Diamond Hill Capital Management. Dillon added that traditional market cap-weighted indexes are based on current price and can overweight overvalued securities and underweight those that may be undervalued. He said Diamond Hill's ETF starts with a universe of the 700 largest U.S.-listed companies and estimates the intrinsic value for each. It then takes the 500 largest of these companies into the fund and weights them according to their intrinsic values. Subscribe to TheStreetTV on YouTube: http://t.st/TheStreetTV For more content from TheStreet visit: http://thestreet.com Check out all our videos: http://youtube.com/user/TheStreetTV Follow TheStreet on Twitter: http://twitter.com/thestreet Like TheStreet on Facebook: http://facebook.com/TheStreet Follow TheStreet on LinkedIn: http://linkedin.com/company/theStreet Follow TheStreet on Google+: http://plus.google.com/+TheStreet
Views: 131 TheStreet: Investing Strategies
Take a closer look at the first 15 years of the S&P 500® Equal Weight as Invesco’s John Feyerer and S&P DJI’s Craig Lazzara and Shaun Wurzbach explore the potential risk/return benefits of one of the first non-capitalization indices to emerge as a template for passive investments.
Views: 150 S&P Dow Jones Indices Channel
On today’s video we are going to cover the topic of ETFs, Dividend ETFs specifically and then I will explain why I won’t be buying ETFs on the dividend experiment. Well, at least not for now! We will see if that changes later on. ETFs are usually based on an index. For example, it might be based on the S&P500 which is a market-capitalization-weighted index of the 500 largest U.S. publicly traded companies by market value. You would essentially be buying a basket of all these companies and track with them as they each go up or down. ------------------------------------------------------------------------------------------------------------------------------------ If you are interested in potentially *living off dividend income and becoming financially independent* then you may be interested in subscribing. You are very welcome to join me! I also have a facebook page that is very lonely at the moment so head on over and give it a like if you use Facebook! I will post stock updates and new videos on there too. https://www.facebook.com/TheDividendExperiment
Views: 318 The Dividend Experiment
#Dividends #Dividendstocks Dividend Fund Showdown! In this video I discuss two dividend exchange traded funds or "ETFs" from two different fund companies. We'll look at total return, expense ratio, yield, volatility, sector weightings, and much more. THE VALUE LINE® DIVIDEND INDEX METHODOLOGY The Value Line® Dividend Index is an equal-dollar weighted index comprised of U.S. exchange-listed securities. The index methodology is focused on quality companies that have an above-average dividend yield. Value Line tracks 1700 stocks from 100 industries. Registered investment companies, limited partnerships and foreign securities not listed in the U.S. are excluded. The universe is screened to eliminate any stock that fails to achieve a 1 or 2 rank by Value Line’s “Safety” ranking system on a scale of 1 (highest score) to 5 (lowest score). Included in Value Line’s proprietary Safety ranking system is an evaluation of a stock’s volatility over the previous five years, as well as its “Financial Strength” rating, which is Value Line’s measure of a company’s financial condition. Financial strength is determined by a variety of factors including a company’s debt to capital ratio, amount of cash on hand, level and consistency of sales and profits, returns on capital, as well as a company’s position and performance within an industry. Select stocks with an indicated dividend yield greater than that of the Standard & Poor’s 500 Composite Stock Price Index and a market cap of $1 billion or more. The index is equally weighted to eliminate single stock risk and the process is repeated monthly. - Ftportfolios.com Buy dividend stocks commission free and receive a cash bonus: https://mbsy.co/qgvmm Connect with me on Instagram: @kennyrrobinson Mailing Address: P.O. Box 4336 Pocatello, Idaho 83205 Easiest Way To Fix OR Build Credit: https://selflender.com/refer/16355093 Best High-Interest Savings Account: https://mailchi.mp/7fd25a4138b5/savings Join the discussion by clicking on the "Community" tab! Disclaimer: I'm not your financial advisor, attorney, or tax professional, and nothing I say is meant to be a recommendation to buy or sell any financial instrument. This video is intended for entertainment purposes only. Do your own due diligence, and take 100% responsibility for your financial decisions. Seek professional advice and guidance to aid your financial decisions.
Views: 2820 Kenny Robinson
I have concluded many of my videos with some variation of “You’re probably better off in low-cost market cap weighted index funds”, which is a statement that I believe. What I have not told you, and the reason that I think I owe you an apology is that I do not invest my own money in market cap weighted index funds. Follow the link to read more content from the Passmore/Felix team at PWL Capital. https://www.pwlcapital.com/teams/passmore-felix/?utm_source=youtube&utm_medium=copy&utm_campaign=ben2019&utm_content=esgratings ------------------ Follow Ben Felix on - Twitter: https://twitter.com/benjaminwfelix - LinkedIn: https://www.linkedin.com/in/benjaminwfelix/ Follow PWL Capital on: - Twitter: https://twitter.com/PWLCapital - Facebook: https://www.facebook.com/PWLCapital - LinkedIn: https://www.linkedin.com/company/pwl-capital/ You can find the Rational Reminder podcast on Google Podcasts: https://www.google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNz Apple Podcasts: https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2 Spotify Podcasts: https://open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA ------------------
Views: 4082 Ben Felix
The Australian Equity market is one of the most heavily concentrated in the world. Listen to Russel Chesler, Director of Investments and Portfolio Strategy introduce MVW, the first fund of its kind in Australia, one that equally weights Australia’s largest and most liquid stocks.
Views: 308 VanEck Australia
Russell 2000 IWM ETF Fund has a clear long bias with new weekly demand imbalance in control. Price retraced to weekly demand level around 151.50 and reacted strongly to it creating lower timeframe demand zones on the daily and even lower timeframes. There is a clear long bias on this ETF Fund. Lot of room for price to rally all the way up to weekly supply imbalance around 170.50. IWM FUND DESCRIPTION A little information about this fund. IWM tracks a market-cap-weighted index of US small-cap stocks. The index selects stocks ranked 1,001-3,000 by market cap. IWM is among the best choices in the crowded US small-cap field. The fund tracks the popular Russell 2000 index and boasts low holdings costs with excellent liquidity, features that have helped it attract billions in assets. IWM's broad basket makes it one of the most diversified funds in the segment. Notably, the fund delves into micro-cap territory, and has often been riskier than our neutral benchmark (as measured by beta) as a consequence. ------------------------ For more information on how to trade Forex and stocks using supply and demand imbalances visit https://www.set-and-forget.com/
Views: 365 Set and Forget Trading Community
In this video Roger and David discuss why most index funds are capitalization weighted and what are the benefits and the risk of that structure. We also discuss fundamental indexing as practiced by Research Affiliates as well as the "indexing" strategies used by Dimensional Fund Advisors (DFA). Money For the Rest of Us is a personal finance channel on money, investing and the economy with new videos released every Monday and Wednesday. Please subscribe to my channel here: https://www.youtube.com/user/jdavidstein1?sub_confirmation=1 You can get more info about Money For the Rest of Us here: https://moneyfortherestofus.com
Views: 198 Money For the Rest of Us
https://goo.gl/QPCkqk - Start earning with binary options like millions of traders do Weighting stocks on an equal basis, also known as the equal-weight methodology, is one of the oldest versions of the phenomenon now known as smart beta. As such, the equal-weight methodology is prevalent among exchange-traded funds (ETFs), including both broad market and sector funds. One of the most venerable equal-weight ETFs is the Guggenheim S&P 500 Equal Weight ETF (RSP), which is fast-approaching its 14th birthday. As its name implies, RSP follows the S&P 500 Equal Weight Index, an equal-weight version of the S&P 500. Home to nearly $13 billion in assets under management, RSP is also one of the largest equal-weight ETFs on the market today. While that figure is dwarfed by traditional, cap-weighted S&P 500-tracking ETFs, what is not diminished is RSP's lengthy track record of outperforming standard S&P 500 strategies. Over the past three years, RSP has topped the cap-weighted S&P 500 in 74 percent of rolling monthly periods, according to Guggenheim data. For the five years ending March 31, 2017, that number grows to 83 percent of rolling monthly periods, but more important are RSP's 10-year returns. During that span, RSP has topped the cap-weighted S&P 500 in 100 percent of rolling monthly frames, according to issuer data. (See also: S&P 500 ETFs: Market Weight vs. Equal Weight.) The equal-weight approach was implemented to eliminate the large-cap bias of traditional capitalization-weighted products, said Guggenheim. The resulting reduction in concentration risk combined with a quarterly rebalance has helped RSP consistently outperform the S&P 500 on a 10-year rolling basis since the fund's 2003 inception. Critics often assert that outperformance offered by equal-weight funds and strategies is mostly attributable to the size factor, or the emphasis these funds place on smaller stocks relative to their cap-weighted counterparts. Even if that is true, RSP is not significantly more volatile than the S&P 500. RSP's standard deviation of 10.7 percent is just 30 basis points above the same metric on the cap-weighted S&P 500. (See also: 3 Types of Indexing for ETF Successs.) RSP's sector weights differ significantly from the standard S&P 500. For example, the cap-weighted S&P 500 allocates over 22 percent of its weight to technology stocks, the index's largest sector weight. On the other hand, RSP's technology exposure is just 13.6 percent. RSP's largest sector weight is 16.2 percent to consumer discretionary, an overweight of 400 basis points relative to the S&P 500. Financials, the second largest sector weight in the cap-weighted S&P 500 at 14 percent, are RSP's fourth largest sector weight at 12.4 percent. (See also: Equal Weight Excellence for This ETF.)
Views: 50 ETFs
Australians who invest in the ASX200 are prone to overexposure risk, as just 10 companies make up 50 per cent of the index, according to investment management firm, VanEck. So, VanEck says to improve improve diversification and seek out performance, investors should consider equal weighted exchange traded funds Jessica Amir chats to VanEck Australia about what an equal weighted ETF is and how it works.
Views: 265 Money Management
ETF index funds typically weigh stocks by enterprise value. The more expensive the company, the greater the weighting in the index. If you do research, you soon discover that selecting the most expensive stocks is not necessarily ideal for the best returns. Choosing stocks by profit or turnover brings better long-term returns on equities than the market capitalization weighting that prevails at ETFs. Those who buy ETFs generally buy the most expensive stocks in the market. Not really a good selection of stocks. Easy investing. Obermatt Stocks Update and the Free Handbook helps you. Author/Lecture DR. HERMANN J. STERN Video/Editing NAIM RASHITI, rashiti.com
Views: 16 Stock investing made easy
The TrimTabs All Cap International Free-Cash-Flow ETF (TTAI) focuses on delivering alpha, or generating long-term returns that exceed those of the S&P Developed Ex-U.S. Index. By combining seasoned and disciplined active management with our multi-factor quantitative models focused on free-cash-flow growth, strong balance sheets, and share reduction, TTAI identifies the 100 companies in non-U.S. developed markets that best fulfills its investment criteria. Disclosures: The fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. The statutory and summary prospectuses contain this and important information about the investment company, and it may be obtained by calling 800-617-0004. Read it carefully before investing. There is no guarantee that TTAI will achieve its investment objective. Investing involves risk, including the possible loss of principal. Because the Fund is an ETF (rather than a mutual fund), shares are bought and sold at market price (not NAV), may trade at a discount or premium to NAV, and are not individually redeemable. Owners of the shares may acquire those shares from the Fund and tender those shares for redemption to the Fund in Creation Unit aggregations only, consisting of 25,000 shares. Brokerage commissions will reduce returns. Investments in the Fund include risks associated with small-and mid-cap securities, which involve limited liquidity and greater volatility than large-cap securities. Returns on investments in foreign securities could be more volatile than investments in domestic securities (TTAC). The S&P Developed Ex-U.S. BMI Index is a market capitalization weighted index that defines and measures the investable universe of publicly traded companies domiciled in developed countries outside the U.S. The Developed Index is float adjusted, meaning that only those shares publicly available to investors are included in the Developed Index calculation. It is not possible to invest directly in an index. Quasar Distributors, LLC Free Cash Flow (FCF) represents the cash that a company is able to generate after accounting for capital expenditures. Alpha is a measure of performance on a risk-adjusted basis. It is not possible to invest directly in an index.
Views: 4 TrimTabs Asset Management
Visit https://www.etftrends.com Investors seeking diversified opportunities in both domestic and overseas equity markets may consider a revenue-weighting ETF strategy to focus on strong fundamentals. "Revenue is sort of the fundamental weighting - leads you to a value oriented factor, leads you a little bit of a size oriented factor," Matt Straut, Head of RIA Distribution for OppenheimerFunds, said at the recent Morningstar ETF Conference. Investors who believe in a return to fundamentals can look to the revenue-weighted methodology, including options like the Oppenheimer Large Cap Revenue ETF (NYSEArca: RWL), Oppenheimer Mid Cap Revenue ETF (NYSEArca: RWK) and Oppenheimer Small Cap Revenue ETF (NYSEArca: RWJ).
Views: 199 ETF Trends
How are Canadian advisors using equal-weight strategies to meet client goals? S&P DJI's Randall O'Leary sits down with Invesco's Chris Doll and Shaunessy Investment Counsel's James Garcelon to discuss implementation of S&P 500 Equal Weight in Canada.
Views: 60 S&P Dow Jones Indices Channel
ETFs (Exchange Traded Funds) are one of the best tools for beginner investors. It gives you exposure to many stocks in certain sectors or even across multiple sectors. ETFs are sold and traded on the open stock market so you can buy and sell them easily whenever the time is most profitable or convenient for you. ETFs also can be run by an active money manager but law states that they MUST have full transparency of the fund so you will know all the stocks and bonds that they invest in. Mutual funds/ETF always boils down to the higher the risk, the higher the reward. But remember, the higher the reward, the more they will take a cut. (Expense Ratio). When discussing ETFs, there are 3 Main Indexes: 1) S&P 500 2) NASDAQ 100 3) DJIA 30 The dominant one S&P 500 stands for Standard & Poor’s Depository Receipts. It is the based off the 500 largest companies listed on the NYSE or NASDAQ by market cap. Multiple investment companies have index based off the S&P 500 which serve the same purpose. It ends up becoming just a choice of personal preference for the investor. Examples include S&P Global (SPY), Vanguard (VOO), iShares (IVV). Within ETFs, the index can be weighted differently 1) Price-Weighted Index (Ex: DIA) 2) Market Cap-Weighted Index (Ex: SPY) 3) Equal-Weighted Index (Ex: RSP) Price weighted index- Each component stock makes up a fraction of the index proportional to its trading price. The $10 stock is weighted nine times higher than the $1 stock. Overall, this means that this index is composed of 90% of the $10 stocks and 10% of $1 stock Market Cap Weighted Index- Market capitalization-weighted index, each component stock is weighted according to its market capitalization. Equal-Weighted Index- Holds an equal dollar amount (say $10,000) in each of the component companies. An issue with equal-weighted indices is the frequency of re-balancing. As stock prices change, the weightings will move away from an equivalent level, but if the index re-balances too frequently, it becomes impractical for funds to track the index in a cost-efficient manner. So it is usually re-balanced quarterly. ► Subscribe: https://tinyurl.com/ya8m2wbz Amazon Book Links ► Rich Dad, Poor Dad by Robert Kiyosaki- http://amzn.to/2FkXpuF ► Intelligent Investor by Benjamin Graham- http://amzn.to/2HyvxnI ► Rule #1 by Phil Town- http://amzn.to/2sI4naF ► Four Pillars of Investing by Willam Bernstein- http://amzn.to/2CBsmYG Disclaimer: I am not a Financial Advisor or Tax Professional, the information provided is for entertainment only. This is NOT investment advice, you should always consult with a professional Financial Advisor or Tax Professional. I'm not responsible for any monetary gain or loss that occurs following my opinion.
Views: 64 Simplified Investments
Market cap-weighted U.S. equity index funds are performing well now due to both structural advantages and cyclical factors, says Morningstar's Ben Johnson. For all Morningstar videos: http://www.morningstar.com/cover/videocenter.aspx
Views: 803 Morningstar, Inc.
Smart Beta ETFs are surging in popularity because they fill the space between active and passive investing, says John Hoffman, Director of ETF Capital Markets at Invesco PowerShares. Most institutional decision makers define smart beta ETFs as non market-cap weighted funds that use rules-based, predetermined methodologies to pick stocks. Hoffman says low volatility, momentum, and buyback ETFs have been seeing the greatest inflows over the past year from both retail and institutional investors. Subscribe to TheStreetTV on YouTube: http://t.st/TheStreetTV For more content from TheStreet visit: http://thestreet.com Check out all our videos: http://youtube.com/user/TheStreetTV Follow TheStreet on Twitter: http://twitter.com/thestreet Like TheStreet on Facebook: http://facebook.com/TheStreet Follow TheStreet on LinkedIn: http://linkedin.com/company/theStreet Follow TheStreet on Google+: http://plus.google.com/+TheStreet
Views: 133 TheStreet: Investing Strategies
https://goo.gl/QPCkqk - Start earning with binary options like millions of traders do The Vanguard Total Stock Market ETF (NYSEARCA: VTI) tracks the performance of the CRSP U.S. Total Market Index. The fund has returned 6.23% since its inception in 2001. The fund is a market capitalization-weighted index that measures the entire investable U.S. equities market. It includes small-, mid- and large-cap companies. The fund is managed in a passive manner and uses an index-sampling strategy. The fund has over 3,800 stocks in its portfolio, a massive amount for an ETF. The median market cap of the fund's holdings is $51.1 billion. The price-to-earnings (P/E) ratio of the holdings is 21.9, with a price-to-book (P/B) ratio of 2.8. The P/E ratio takes the current market value of companies' shares divided by the earnings per share (EPS). The P/B ratio takes the share price divided by the total liabilities minus intangible assets and liabilities. The financial sector has the highest weighting in the fund at 18.9%, followed by the technology sector with a weighting of 16.1%. The health care sector is in third with a weighting of 14%, with consumer services having a weighting of 13.8%. Apple (NASDAQ: AAPL) was the largest holding as of June 2015 with a 3.2% weighting, followed by Exxon Mobil (XOM) with a 1.5% weighting. Microsoft (MSFT) was the third-largest holding with a weighting of 1.4%, while Google (NASDAQ: GOOG) was the fourth-largest holding with a weighting of 1.3%. The top 10 holdings had a combined weighting of 14%. Characteristics The Vanguard Total Stock Market ETF is an open-ended fund issued by Vanguard and advised by the Vanguard Equity Investment Group. The fund is a passive index fund and therefore has a remarkably low expense ratio of 0.05%. This is 95% lower than the average expense ratios of similar funds. The fund has a very low turnover rate of 2.9%, meaning that there are limited transaction costs for changing the fund's holdings. The expense ratio does not include any commissions or other brokerage fees. The low expense ratio is beneficial for long-term investors in the fund. Shares are trading around $109 as of July 2015. The fund has an average daily volume of 2.56 million shares, indicating that there is a great deal of liquidity in the ETF. VTI shares trade on the New York Stock Exchange. Investors can buy shares with no commission through Vanguard Brokerage Services. Suitability and Recommendations VTI is an extremely diversified fund. Its large amount of holdings reflect the entire universe of investable U.S. securities. The fund has exposure to small-cap stocks which, can be more volatile than mid- or large-cap holdings. The fund has a beta of 1 when compared to the larger market. The fund has exposure to systematic risk, which is the risk inherent in the entire market. A larger downturn in the U.S. economy or the world economy is likely to impact the value of the fund. Still, the fund has a trailing three-year standard deviation of 9.8%, which is not very volatile. Standard deviation is a measure of the
Views: 211 ETFs
We love to trade the different stock indices (S&P 500, Dow Jones, Nasdaq 100, Russell 2000, and S&P 100), either via the futures or the ETFs. In this first part (of two), we studied what affects the indices and how each is affected by implied volatility (IV). Part two will describe how each index reacts to different market environments. A key part of Data Science is to use graphics to simplify complex concepts. Thankfully, we have Mike Rechenthin PhD, our in house Data Science expert, who lives up to his nickname of Dr. Data. The first graph showed where the implied volatility is on the different indices now. It was no surprise that the Russell 2000 (RUT) was the highest and the Dow Jones (DJI) the lowest as the RUT has the highest IV 82% of the time and either the DJI or the S&P 100 has the lowest 96% of the time. Subsequent tables describe the stock composition of each index and that the DJI is price weighted while the others are weighted by market capitalization. The next graph shows the makeup of each index by the market cap of each with the RUT of course being made up of all small caps which is why it consistently has the highest IV. Some stocks are found in multiple indices. Mike makes the point that it’s important to know what type of overlap you have in your portfolio. A graphical representation of the price weighted Dow Jones was displayed. Dr. Data noted how MMM has a much greater impact on the index than GE even though MMM’s market cap is a third of GE’s (it’s an old index). One hundred shares in the DIA equates to owning about four shares of Apple, etc. The final graphic was a handy table that shows the sector makeup of each index in percentage terms. You can see where you might have overlap and where you don’t. Utilities were singled out as not making up much of any of the indices. ======== tastytrade.com ======== Finally a financial network for traders, built by traders. Hosted by Tom Sosnoff and Tony Battista, tastytrade is a real financial network with 8 hours of live programming five days a week during market hours. From pop culture to advanced investment strategies, tastytrade has a broad spectrum of content for viewers of all kinds! Tune in and learn how to trade options successfully and make the most of your investments! Watch tastytrade LIVE daily Monday-Friday 7am-3:30pmCT: http://ow.ly/EbzUU Subscribe to our YouTube channel: https://www.youtube.com/user/tastytrade1?sub_confirmation=1 Follow tastytrade: Twitter: https://twitter.com/tastytrade Facebook: https://www.facebook.com/tastytrade LinkedIn: http://www.linkedin.com/company/tastytrade Instagram: http://instagram.com/tastytrade Pinterest: http://www.pinterest.com/tastytrade/
Views: 2808 tastytrade
A phrase you may have heard mentioned several times lately is smart beta. So, what does smart beta mean? Over the course of the next four video blogs, we'll try to explain. We'll hear from experts who like smart beta - and those who don't. And, most important of all, we'll be investigating whether it actually works. First of all, what do we mean by beta? And for that matter alpha? Well, alpha and beta are statistical measurements for calculating returns from equities - both mutual funds and individual stocks. Alpha is a measure of how an investment fares compared to an appropriate benchmark - say, for example, the returns delivered by Marks and Spencer or Lloyds Banking Group shares, or by the Schroder UK Equity Fund, compared to the FTSE 100 Share Index of leading British companies. Beta is based on the volatility of an investment. You can think of it as the tendency of that stock or fund's returns to respond to swings in the market. Active fund managers pursue alpha; in other words, they seek returns over and above those that the market as a whole delivers. Passive investors, on the other hand, acknowledge how hard it is to identify those specific stocks that will outperform the market. Rather than pay an active manager to try - and probably fail - to pick the winners, and avoid the losers, they choose to ignore alpha altogether. Instead they invest in an entire market and simply capture the market's beta. They're happy to follow a market through its up and downs, safe in the knowledge that, almost invariably, the long-term trend is upwards - and that, over time, they're saving a fortune in charges by opting for low-cost passive funds. Traditionally, passive investors have used index funds weighted according to market capitalisation - in other words, the price of an individual stock multiplied by the number of shares. The bigger the market cap, the bigger the weighting. However, market-cap weighting does have its critics, who say it can overweight overvalued stocks and, conversely, underweight undervalued ones. Instead, market-cap sceptics prefer funds that are weighted according to other fundamentals - for example, company size, or the dividends that companies return to shareholders. In their view, funds weighted according to other factors are likely to deliver a better trade-off between risk and return than funds based purely on market capitalisation. In a sense, they're neither active nor passive, but would like to have the best of both worlds. They want to capture market beta, but in the smartest possible way - hence the phrase smart beta. Now, a word of warning... What we've just given you is a hugely simplified explanation of an extremely complex subject. Smart beta is an umbrella term that lacks strict definition. Others prefer terms such as advanced beta, alternative beta or fundamental indexing. It's also a subject that divides opinion. In the second video in this series, we'll be hearing from a range of experts with very different viewpoints. Until next time, goodbye - and thank you for watching.
Views: 8768 Sensible Investing
In this video Mike Swanson talks about the hidden costs in ETF's. As investments they may not be as great as they seem to be especially when you look at the fees and the positions individual ETF's hold. For more go to: http://www.wallstreetwindow.com
Views: 1011 WallStreetWindow
Mark Dunne of Shares Magazine stands in for Russ Mould in a Fundamentals video about the db X-trackers FTSE 100 Equal Weight ETF. This product only began trading on the London Stock Exchange last August, but is already proving extremely popular with investors. The information in this video is for the use of professional advisers only. Past performance is not a guide to future performance and some investments need to be held for the long term.
Views: 227 AJ Bell Investcentre
https://goo.gl/QPCkqk - Start earning with binary options like millions of traders do India exchange-traded funds (ETFs) are comprised of securities traded in India. This is an emerging market play, meaning it carries higher risk than more mature markets. (See also: The Risks Of Investing In Emerging Markets.) India’s economy is growing, but is not entirely stable and could be subject to volatility. The higher risk can mean higher returns, as each of the ETFs on our list shows. We have selected India ETFs that have the highest year-to-date returns of all India ETFs. An India ETF is not a buy-and-hold investment. You must consistently monitor not only each ETF’s performance, but also the condition of the economy in India. (See also: Citizens Scramble for Cash After India’s Currency Ban.) Here are the top five India ETFs by year-to-date returns as of August 10, 2017. 1. Direxion Daily MSCI India Bull 3x ETF (INDL) INDL uses the MSCI India Index as its benchmark. While it aims to invest 80% of its assets in securities from the index, the other 20% may be invested in leveraged financial instruments. The goal is to achieve a 300% return. That is, the fund tries to grow at three times the rate of the index. This adds a great deal of risk because losses can be accelerated the same way gains can when holdings are leveraged. The focus on large-cap and mid-cap stocks helps offset some of the risk. Avg. Volume: 43,214 PE Ratio (TTM): N/A Yield: 0.00 YTD Return: 103.27% Expense Ratio (net): 0.95% 2. Columbia India Infrastructure ETF (INXX) This ETF follows the Indxx India Infrastructure Index as its benchmark. At least 80% of assets go into companies that are listed on the index. The focus is on companies involved in infrastructure, so this would be an investment for those who think India is likely to grow its infrastructure to meet the needs of the world’s second-largest population (behind China). This focus gives investors the opportunity to invest in a narrow slice of the Indian economy. Avg. Volume: 31,233 PE Ratio (TTM): N/A Yield: 2.21% YTD Return: 35.42% Expense Ratio (net): 0.98% 3. VanEck Vectors India Small-Cap ETF (SCIF) For investors who like both small-cap stocks and Indian stocks, SCIF is an opportunity to invest in this specialized basket of stocks: the MVIS India Small-Cap Index. The fund may use depositary receipts in addition to investing directly in securities from the index. Note that micro-cap companies are included in the index, so this investment can carry higher risk. Avg. Volume: 88,507 PE Ratio (TTM): N/A Yield: 0.95% YTD Return: 46.33% Expense Ratio (net): 0.78% 4. Columbia India Small Cap ETF (SCIN) This is another small-cap India ETF benchmarked to the MVIS India Small-Cap Index. The stocks in the index are weighted by capitalization, so the ETF may weight the stocks similarly. The fund aims to keep 80% of its assets in securities from the index, but may have as much as 95% of assets invested in the index at any given time. Avg. Volume: 14,071 PE Ratio (TTM): N/A
Views: 1265 ETFs
The SPY is a market-cap weighted index. Cap-weighting is a passive method to keep costs down. Weighting by market capitalization has a few consequences that turn me off buying it. I have no intention of ever buying the SPDR S&P 500 Trust ETF (SPY). But before I get into the reasons why I will never own this ETF, below are some popular reasons why many will buy the SPY: Fast diversification across 500 stocks in various sectors and industry groups Very low gross expense ratio of 0.0945% Large-cap U.S. index full of blue chips Passive management Dividends Super liquidity For many, it appears to be one-stop shopping that is simple, diversified and cost-effective. So why would I ever make the claim that I will never buy this ETF? And why should you care? No, I won The answer is related to how the fund keeps the expense ratio down – by market-cap weighting the positions in the fund. Weighting by market-cap might seem logical - at first. Market-Cap Weighting Market capitalization is simply the price tag of outstanding shares times the share price. Shares x Price = Market Cap Many funds prefer to use publicly available shares, or float, instead of outstanding shares – but the theory is the same. Cap-weighting does not factor in such things such as cash and debt. A market-cap weighted index is pretty much like it sounds. Stocks with a larger market capitalization have a larger weighting in the fund. A stock with a market cap of $50 billion would have ten times the weight in
Views: 32 Bora Fashion
As the exchange traded fund community matures, more investors are branching out from traditional market cap-weighted index strategies, looking into smart beta or factor-based investments that incorporate more customized indexing methodologies to diversify their portfolios. "I think advisors, investors have become more comfortable with factor investing in general, and the virtue of multi-factor is to say we know factors go in and out of favor and by combining factors like say quality and low volatility, which are traditionally more defensive with more offensive factors - value, momentum, size - you can actually achieve portfolio exposure that can really work in multiple regimes," Ted Lucas, Head of Investment Strategies & Solutions, Hartford Funds, said at Inside ETFs. For example, investors can look to multi-factor ETF strategies such as the Hartford Multifactor Emerging Markets ETF (NYSEArca: ROAM), Hartford Multifactor Developed Markets (ex-US) ETF (NYSEArca: RODM), Hartford Multifactor US Equity ETF (NYSEArca: ROUS), Hartford Multifactor Global Small Cap ETF (NYSEArca: ROGS) and Hartford Multifactor REIT ETF (NYSEArca: RORE).
Views: 65 ETF Trends
What IS the S&P 500, and why does everybody keep referencing it and the returns it provides? Check out the video to find out! Links: $SPY Information: https://us.spdrs.com/en/etf/spdr-sp-500-etf-SPY Yahoo Finance: https://finance.yahoo.com/quote/SPY/ $VOO Information: https://investor.vanguard.com/etf/profile/voo Yahoo Finance: https://finance.yahoo.com/quote/voo/ $IVV Information: https://www.ishares.com/us/products/239726/ishares-core-sp-500-etf Yahoo Finance: https://finance.yahoo.com/quote/ivv/ Budgeting 101: https://www.youtube.com/watch?v=lF2yqchJAIE Why You SHOULDN'T Save Money: https://www.youtube.com/watch?v=xosoDgh-1Og Easiest Way To Become A Millionaire: https://www.youtube.com/watch?v=ekmC_EXuDhM You Can't Teach Everybody Everything: https://www.youtube.com/watch?v=l7u3FP20E9M Transcript: I've had a couple people give some feedback on earlier videos and mention to me that certain things that I talk about don't really pertain to them, one of which is the S&P 500. If you're investing in the stock market in any capacity, than you probably know what the S&P 500 is, but if you haven't yet started investing, or if your only exposure to the stock market is through your employer 401k plan, than you might not know what this is. The S&P 500 is an American stock market index that was first introduced as the "Composite Index" in 1923, and at the time tracked only a small number of stocks. In 1926, it expanded to include 90 stocks, and then in 1957 expanded again to it's current number of 500. The S&P is currently based on the market capitalization or market cap, of 500 of the most valuable companies issued on either the New York Stock Exchange, NASDAQ, or Chicago Board Options Exchange. It is based on what is called a "capitalization-weighted index" which just means that the more valued a company is versus the other components in the index, the more heavily it will be weighted. Let's give an example. Let's say that I came up with a cap-weight index, we'll call it the Money Matters index, and I've decided that we'll base it on 4 companies, A, B, C, and D. If A has a market cap of 10 billion, B of 5 billion, and C and D both of 2.5 billion, then we would allocate 50% of our resources towards company A, 25% towards B, and 12.5% towards both C and D. Keep in mind that the values of these companies fluctuate on a daily basis (when the market is open, of course), so any index using this method will have to be recalculated frequently. Because of the way the S&P is weighted, along with the large amount and diversity of businesses it tracks, the S&P is one of the most commonly invested in, referenced, and benchmarked against indices, and is considered by most to be the best representation of the US stock market. There are plenty of index funds and ETFs (exchange traded funds) that do their best to replicate the performance of the S&P 500. Note that when I say replicate the performance, I am talking about BEFORE fees and expenses, which can have a HUGE impact on your net returns. We'll get into that more in a later video, just suffice it to say that you should always try to minimize the amount of fees and expenses you're getting charged when considering a fund or ETF to invest in. A couple of examples of these ETFs or index funds are the ticker symbols $SPY, $VOO, and $IVV. I'll link to these down below so you can take a look at them. It should be noted that you CAN replicate this index on your own, by allocating your portfolio in such a way as to invest the same percentages as the S&P 500 into each individual company, but you can imagine what a nightmare it would be to implement and keep up with properly. Not to mention the hassle you would have to deal with come tax time. If you want to invest in the S&P 500, I would recommend picking a ticker symbol you like and using that. Given the diversity and amount of companies in the S&P 500, and the ease with which you can invest in them, it's not hard to see why it's a default, set and forget kind of investment for the vast majority of investors. Thanks for watching, and until next time, this is Ron signing off, with Money Matters. __ Subscribe To Our Channel: http://yt.vu/+moneymatters Check Out Our Instagram: http://www.instagram.com/makingfinancepersonal __ DISCLAIMER: This video is for educational and entertainment purposes only. I am not a lawyer, financial adviser, or financial professional. Watching this video does not equate to or replace receiving professional advice regarding any of the aforementioned fields. Anything stated in this video is my opinion only and success is not guaranteed. We will not accept any responsibility or liability for the actions you take pertaining to the content of any video hosted on this channel.
Views: 17 Money Matters
Dow Jones ETF DIA is trying to break weekly supply imbalances located at all time highs. Supply and demand technical analysis tell us that we expect that supply zone between 262 and 269 to be eliminated. A similar scenario has happened on Nasdaq with its weekly supply level eliminated as expected.Weekly demand around 254 gained control as expected. Longs at new demand levels in lower timeframes are possible. Longs if weekly supply level is eliminated or new lower timeframe demand imbalances are created in this attack to weekly supply. DIA FUND DESCRIPTION A bit more information about this fund. DIA tracks a price-weighted index of 30 large-cap US stocks, selected by the editors of the Wall Street Journal. Despite the name recognition that comes from tracking the Dow and its own popularity, DIA is not the ideal ETF for investors who want broad-based exposure to US large-caps. The fund’s tiny portfolio, arbitrary selection, and antiquated weighting produce significant sector biases relative to the market, and cover only a fraction of the large-cap space, typically represented by hundreds of names. As supply and demand traders, we do not need to pay attention to the news, fundamentals or any earnings reports. Once a big timeframe imbalance has gained control, earnings do just the opposite and reacts strongly to those imbalances. Why is it that you see positive earnings and then the underlying stock drops like a rock, or a negative earnings announcement and the stock rallies like a rocket out of control? You are probably missing the fact that there are big imbalances gaining control.Unless you are doing very short term trading and scalping, you should not worry about fundamentals or earnings announcements.You can use these imbalances to plan your trades in lower timeframes. Trading is just waiting for the right trigger points and scenarios to present themselves, this game has got a name and it’s called the waiting game. We need to patiently wait for the correct scenarios and setups to happen and wait for price to pullback or dip into the price levels we want to trade, in our case these price levels are made of supply and demand imbalances.There are several ways of buying stocks. When trading stocks, you can buy shares of the underlying stock or use options strategies to go long or short at these specific supply and demand levels, long calls or long puts or spreads. You can even buy a CFD (contracts for difference) if you are in a country where it’s allowed. For more information on how to trade Forex and stocks using supply and demand imbalances visit https://www.set-and-forget.com/
Views: 556 Set and Forget Trading Community
Sub Headline: History is not Predictability But It’s Interesting Synopsis: The S&P 500 Index has been called the poor man’s portfolio. It’s extremely popular investment and is available in mutual funds, ETFs, annuities and universal life insurance. It even has it’s own volatility index, the VIX and is accessible in multiple media outlets as is the S&P 500 Index. Watch the interview with certified financial planner Chris Jacob as he reviews the performance history of the S&P 500 Index. Content: The total return of a stock index like the S&P 500, which is widely quoted as a benchmark for stock performance, is a calculation that depends on the change in the index, either positive or negative, plus reinvested dividends. Since an index is not an investment, but a statistical computation, however, the reinvestment occurs only on paper—or more precisely, in a software program. Rather than reinvesting dividends in the stocks that pay them, the index provider reinvests all dividends in the index as a whole. Total return on an index is calculated daily, though the results are more typically provided as monthly, annual, or annualized figures, expressed as a percentage. Capitalization-weighted indexes are designed to reflect the economic impact of companies with the highest market capitalization. Market cap is calculated by multiplying the number of sharesby the stock’s current market price. The majority of indexes are capitalization weighted, including the S&P 500 and the Nasdaq Composite Index. Total return, as it applies to an equity index, is a calculation that reflects the positive or negative change in the index plus any reinvested dividends. Most equity indexes report their return two ways, one that is price return only and the other, which includes reinvested dividends. So historical performance in the video segment is the S&P 500 Index with dividends reinvested. If the S&P 500 Index is used in an annuity or universal life product, dividends are not reinvested or distributed to the crediting account of the policy. The S&P 500 Index can be used as a benchmark for your portfolio to gauge its performance. The S&P has experienced down markets, but has been relatively positive over long periods of time. It is also an inexpensive way to invest with comparatively low expenses. Investing in the S&P 500 Index has often been a good start in building a portfolio for new investors. This press release contains content from Light Bulb Press with permission. Syndicated financial columnist Steve Savant interviews retirement expert Chris Jacob, CFP on Indexed Universal Life Insurance An Emerging Asset Class. Steve Savant’s Money, the Name of the Game is an hour-long financial talk show for consumers distributed online in 5 ten-minute video press releases Monday through Friday to 280 media outlets, social media networks and industry portals. (www.lifesizesolutions.com). https://youtu.be/iiaNZB6he1U
Views: 2651 Steve Savant
Hello. You're watching Sensible Investing TV. Welcome to the fourth and final part of our video blog series, A Dummy's Guide to Smart Beta. As we established last time, the idea of smart beta is very appealing. It appears to have the advantages of passive investing - such as low cost and diversification - while avoiding the disadvantages. For example, while traditional index funds are heavily exposed to the biggest companies, smart beta offers more of a balance. But, does it work? Of course, smart beta funds are relatively new, so it's hard to reach firm conclusions about long-term performance. But the early signs are encouraging. Here's a graph from CNBC, for example, which shows how one the first smart beta Exchange Traded Funds - Guggenheim S&P 500 Equal Weight - has performed since its launch in 2003. In that time, according to Morningstar, it's returned an average of 11.3% every year, compared to 8.4 per cent for a cap-weighted S&P 500 ETF. So what about the academic evidence? Well, in the spring of 2013, researchers at Cass Business School in London issued two papers on smart beta, both suggesting again that it does have merits. The studies were based on US share data from 1968 to 2011. The researchers programmed a computer to pick and weight each of the 1,000 stocks in the sample at random - in other words, they simulated the stock-picking ability of monkeys. And they repeated the exercise 10 million times. The outcome? Well, the monkeys did very well! Almost all of those ten million monkey fund managers beat the performance of the market cap-weighted index. The researchers also looked at 13 alternative "smart beta" indices. Every single one of them produced superior risk-adjusted returns than the cap-weighted index. To repeat the warning we gave in the first video in this series, smart beta is a vastly complex and evolving subject, and we have only scratched the surface. As we've explained, it's not without its downsides - not least its complexity and its greater risk. However, although far more research is needed, the early evidence is that smart beta probably is more than just a successful piece of marketing. The final word in this series goes to Weston Wellington of Dimensional Fund Advisors... "In some sense, we can't ever move away from a cap-weighted approach because by definition all investors own all the stocks and the cap-weighted universe of stocks is simply a barometer or a mirror held up to 'how do investors choose to hold their wealth today'. That is why prices are what they are. Financial investigation will continue, we do not know how science will work or when it will have new insights, that's the nature of the beast. We also don't know when the next breakthrough will arrive but there are a large number of economists studying these things and when they discover something they will share it with us." And, rest assured, we'll share it with you to. Thank you for watching.
Views: 3451 Sensible Investing
In this video I cover QE1 - QE3 to get some perspective on where we might be headed. I also looked at the MSCI World Index, a free float-adjusted market capitalization weighted index that consists of 24 developed market country indices, including the US domestic markets. Why? To filter out the noise I look for clues on our direction. To round it off the USD and EURO are reviewed.
Views: 419 Cousin Vinny
https://goo.gl/QPCkqk - Start earning with binary options like millions of traders do Small-cap exchange-traded funds (ETFs) struggled to start 2017, but these ETFs have recently shown some signs of shaking off that lethargy. For investors that remain leery of smaller stocks, it is possible to reduce risk in this asset class with dividend payers. The WisdomTree U.S. SmallCap Quality Dividend Growth Fund (DGRS) offers an avenue to small-cap stocks with impressive dividend prospects. DGRS, which currently resides just below record highs, is up 19.5 percent over the past year. DGRS is one of a growing number of smart beta options in the world of small-cap ETFs. The ETF's index embodies the idea of weighting stocks by fundamental metrics, not market capitalization. The WisdomTree U.S. SmallCap Quality Dividend Growth Index holds companies based on combined growth and quality metrics. (See also: 4 Small-Cap Core ETFs for Bull and Bear Markets.) The growth factor ranking is based on long-term earnings growth expectations, while the quality factor ranking is based on three-year historical averages for return on equity and return on assets. The index is dividend weighted annually to reflect the proportionate share of the aggregate cash dividends each component company is projected to pay in the coming year, based on the most recently declared dividend per share, according to WisdomTree. DGRS holds nearly 260 stocks, nearly five times the number found in a competing small-cap dividend ETF that uses a minimum dividend increase as part of its stock selection criteria. The WisdomTree U.S. SmallCap Quality Dividend Growth Index had 257 constituents as of March 31, 2017, said WisdomTree in a recent note. The reason for the relative broadness of exposure is that the forward-looking earnings growth expectations combined with return on equity and return on assets create a logical framework upon which potential future dividend growth may be built. (See also: 5 Best Smart Beta ETFs That Pay Dividends.) DGRS allocates over 48 percent of its weight to industrial and consumer discretionary stocks. By comparison, the Russell 2000 Index devotes less than 27 percent of its weight to those two sectors. Historical data indicate that small-cap dividend-paying stocks usually outperform their non-dividend counterparts over the long term while being less volatile. DGRS is a couple of months shy of its fourth birthday, and the ETF has returned more than 48 percent since coming to market. Including paid dividends, this small-cap dividend ETF has topped the Russell 2000 by 470 basis points since coming to market while being slightly less volatile than the small-cap benchmark. (See also: Top 3 Small-Cap ETFs for 2017.)
Views: 3 ETFs
Have you ever heard that the stock market cannot go higher on an absolute basis if the Equally-Weighted S&P 500 is underperforming its Cap-Weighted counterpart. Does this measure of market breadth have any predictive value with respect to market direction? What about the sectors themselves? Well, we've run the numbers and the answer is no! Check out the post: The Need To Lead https://allstarcharts.com/need-to-lead/ Subscribe to my Youtube Channel: https://www.youtube.com/allstarcharts?sub_confirmation=1 Follow me on Twitter: https://twitter.com/allstarcharts Sign up for the Free Chart of the Week: http://get.allstarcharts.com/
Views: 632 AllStarCharts
The S&P 500 is the most widely-benchmarked index of U.S. equities. This video explains why. You can download a spreadsheet of all of stocks in the S&P 500 here: https://www.suredividend.com/sp-500-stocks/ ---------------------- Having a benchmark for your investment portfolio allows you to periodically measure its performance and ensure that you’re on pace to meet your financial goals. When it comes to large-cap U.S. equities, there are really two indices that investors can use to benchmark their portfolios: the Dow Jones Industrial Average and the S&P 500. While the differences are not clear in their names alone, the two indices have some important differences. In this video, I’m going to explain why the S&P 500 is the best benchmark for large cap U.S. equities. ---------------------- What is the S&P 500? The S&P 500 is most well-known for containing approximately the 500 largest companies in the United States when measured by market capitalization. The Index also has other criteria, including: • Universe: All constituents must be U.S. companies. • Eligibility Market Cap: Companies with a market capitalization of US$6.1 billion or greater. • Public Float: At least 50% of shares outstanding must be available for trading. • Financial Viability: Companies must have positive as-reported earnings over the most recent quarter, as well as over the most recent four quarters (summed together). • Adequate Liquidity and Reasonable Price: Consists of highly tradable common stocks, with active and deep markets. The index is market capitalization-weighted, which means that companies with larger market capitalizations will have proportionately higher weightings in the S&P 500. If you’re interested in learning more about the S&P 500, please see the link in the description of this video which has additional information on the S&P 500 as well as a free Excel download containing each of the index’s constituent companies and their financial characteristics. Moving on, I’ll now explain 3 reasons why the S&P 500 is superior to the Dow Jones Industrial Average as a benchmark for large capitalization U.S. equities. ---------------------- Reason #1: It Is Market Capitalization-Weighted, Not Price-Weighted One of the main differences between the S&P 500 and the Dow Jones Industrial Average is the way that their weigh their constituent companies. As we discussed earlier in this video, the S&P 500 is market capitalization-weighted, which means that larger companies actually have a larger weight in the index. On the other hand, the Dow is price-weighted. This means that companies with higher stock prices have higher weights in the index. This creates some bizarre weightings within the index. For example, take a moment to pause this video and guess the three Dow components with the highest weightings. Ready? The three Dow components with the highest weightings are: 1. Boeing 2. UnitedHealth Group 3. Goldman Sachs For context, the three largest companies that trade on the U.S. stock markets are: 1. Apple 2. Amazon 3. Google This peculiarity means that companies that are chosen somewhat arbitrarily have an outsized impact on the Dow’s performance. Underperforming the Dow may be more indicative that you’ve been very underweight Boeing rather than that you’ve actually underperformed the broader stock market. ---------------------- Reason #2: The S&P 500 Is Far More Diversified At its name implies, the S&P 500 contains approximately 500 securities. While this number varies slightly (for example, it currently contains 505 companies), it stays very close to its target of 500 companies. For comparison, the Dow Jones Industrial Average contains just 30 companies. Moreover, the its weighting scheme relies on stock price. These two factors together mean that the largest Dow component often has a very large influence on the index’s performance. For example, Boeing has a 9.6% weighting in the Dow at the time this video was published. Apple has just a 3.9% weighting in the S&P 500, despite being a much larger company. ---------------------- Reason #3: The S&P 500 is the Most Widely-Benchmarked Index in the U.S. Before explaining my logic here, I feel that it is important to provide a minor disclaimer. Many times in investing, doing something simply because everyone else is is often a bad idea. Benchmarking your portfolio to the S&P 500 is a rare exception to this. The S&P 500 is the most widely-benchmarked index in the United States. Three of the top four ETFs are benchmarked to the S&P 500. The largest is SPY, which has $268 billion of assets under management. For context, the largest Dow Jones ETF – which has the ticker DIA - has $22 billion of assets under management. If you’re interested in capturing the market’s average performance, we believe that you are far better off investing in an S&P 500 index fund rather than a competitor that tracks the Dow.
Views: 1375 Sure Dividend
https://goo.gl/QPCkqk - Start earning with binary options like millions of traders do The iShares S&P Small-Cap 600 Value fund (NYSEARCA: IJS) is an exchange-traded fund, or ETF, designed to provide investors access to the domestic small-cap equity market by tracking the total performance return of the S&P SmallCap 600 Value Index as its benchmark. The S&P SmallCap 600 Value Index utilizes float-adjusted market capitalization weighting guidelines to track the performance of 460 small-cap company stocks from the U.S. equity market. All companies listed on the index are considered to have a value tilt, measured by the ratios of book value, earnings and sales to price. Additionally, each small-cap company is a constituent of the S&P SmallCap 600 Index. Since the fund's inception in 2000, IJS has generated an annualized total return of 10.11% as of August 2015. How It Tracks It Fund managers with IJS use a true replication strategy to track the performance of the underlying benchmark index. Each of the 462 small-cap domestic company stocks included within the investment mix of IJS follow the same weighting and value screening as holdings found in the benchmark. Fund managers are required to invest a minimum of 90% of the ETF's assets in securities or depository receipts of securities found within the tracking index, with the remaining 10% available for investment in certain futures, options and swap contracts, or cash and cash equivalents at the fund manager's discretion. As of August 2015, IJS has a 12-month median tracking difference, or tracking error, that lags the underlying benchmark index by 0.24%, making the fund efficient in terms of management. While IJS has a focus on small-cap domestic company stocks that are considered undervalued based on specific financial metrics, the fund diversifies in terms of business sectors. The heaviest industry weighting within IJS is the financials sector holding 23.32% of fund assets, followed closely by the industrials sector at 19.47%, the information technology sector at 15.16%, the consumer discretionary sector at 12.65% and the health care sector at 9.28%. Top small-cap holdings within IJS include Emcor Group, Inc. at 0.91%, UIL Holdings Corp at 0.85%, ProAssurance Corp at 0.85%, Southwest Gas Corp at 0.81% and Men's Warehouse, Inc. at 0.8%. Management The iShares S&P Small-Cap 600 Value ETF is managed by and distributed to investors through iShares' parent company, BlackRock, Inc., a leading provider of investment management services for individual, professional and institutional clients. With the support of BlackRock, iShares manages more than $1 trillion in investor assets, and together the companies offer over 700 individual ETFs. Under the iShares family of funds, IJS represents one of 11 small-cap domestic equity funds and is one of three small-cap ETFs with a value tilt. Characteristics IJS fund managers implement a passive management investment style when allocating holdings within the ETF. Unlike active investment management, a passive approach is de
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The health care sector has been the best performer in the S&P 500 index thus far in 2015 and yet S&P Capital IQ still has a number of favorable stock and ETF recommendations in the sector. In June, S&P Capital IQ hosted a Health Care Check Up: Prognosis Bullish live-streaming event for clients. During the event, Jeffrey Loo, head of health care equity research, pointed to a number of catalysts including demographics, health care reform, significant drug development and consolidation. He also highlighted the drivers he sees for the pharmaceutical and biotechnology industries, which are the two largest in the sector. Then Bob Dudley, Select Sector SPDRs Eastern Division Sales Manager, discussed how investors have been increasingly adding fresh money to health care sector and industry ETFs in 2015 and rotating away from the utilities sector. In the first five months of 2015, health care products added $6.7 billion of inflows. Todd Rosenbluth wrapped up the prepared remarks with a discussion of the S&P Capital IQ ETF philosophy and related research. Among the topics were the differences between market-cap weighted iShares and Market Vectors industry ETFs and the equally weighted SPDR peer products.
Views: 235 S&P Global Market Intelligence
In today's GFM Money Minute, Tariq Dennison explains Hong Kong's Hang Seng index outside the Hang Seng Bank building (not the HSBC building as mistakenly said in the video). The Hang Seng index is a market cap weighted index of the prices (not including dividends) of 50 major companies listed on the Hong Kong Exchange (HKEX), including local Hong Kong companies, many mainland Chinese companies, and even the British bank HSBC. You can follow the Hang Seng Indices at https://www.hsi.com.hk/HSI-Net/ and follow more updates from us at www.gfmasset.com
Views: 10756 Retire World Class