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John Spence

Index Spotlight: Russell Style Indexes

by John Spence
Monday, May 6, 2002

Recently we looked at the performance disparity between two small-cap blend indexes: the S&P SmallCap 600 and the Russell 2000. We found that subtleties in index methodology can lead to different results in indexes designed to track similar market ...Read More


  • Capital Asset Pricing Model

    by Frank Armstrong — Wednesday, May 1, 2002

    If Bill Sharpe's first thesis had been accepted, the world of finance might look a lot different today. Fortunately, after the paper was rejected as so uninteresting that there "was absolutely no thesis ...Read More

  • Index Spotlight: Fortune 500

    by Staff — Monday, April 29, 2002

    As passive investing continues to catch on with mainstream investors, understanding the differences between equity indexes is becoming critical for many. Benchmarks that are highly correlated and similar on ...Read More

  • Paul B. Farrell,

    New 12-Step Program for Indexers

    by Paul B. Farrell — Friday, April 26, 2002

    Last Updated: 12:10 AM ET Apr 26, 2002 12-step program for investing in index funds LOS ANGELES (CBS.MW) - I love surfing the web. You go looking for one thing, and you run across a new gem that's so good ...Read More

  • Small-Cap Value Editors' Picks

    by Staff — Wednesday, April 24, 2002

    Many of the cleverest indexers favor heavy weighting of the small-cap value sector. Our favorites include the following. Click on any fund name for more details, the funds are not listed in order of ...Read More

  • Mid-Cap Value Editors' Picks

    by Staff — Wednesday, April 24, 2002

    Recommended mid-cap value funds mirror their mid-cap growth siblings. Click on any fund name for more details, the funds are not listed in order of ...Read More

  • Large Blend Editors' Picks

    by Staff — Wednesday, April 24, 2002

    For large blend, we suggest the following funds that offer both value and growth. Most are S&P 500 funds. Click on any fund name for more details, the funds are not listed in order of ...Read More

  • Large Growth Editors' Picks

    by Staff — Wednesday, April 24, 2002's favorites funds and ETFs for the large growth category are as follows. Click on any fund name for more details, the funds are not listed in order of ...Read More

  • Small Growth Editors' Picks

    by Staff — Wednesday, April 24, 2002

    Loved by active managers and shunned by indexers, the small-cap growth sector nonetheless has a handful of excellent index fund ...Read More

  • Epitaph for a Doomed Fund

    by Staff — Monday, April 22, 2002

    Indexers often talk about "seeding and weeding" of funds in the abstract, which does not always convey the reality of the wreckage created by these practices. Seeding is the frequent launch of new active funds ...Read More

  • Dividends and ETFs

    by Staff — Friday, April 19, 2002

    The structure of an exchange-traded fund can influence its returns, especially when it comes to dividends that companies pass on to shareholders. For example, SPDR 500, by far the largest ETF, is a unit ...Read More

  • Select Sector SPDR Changes

    by Staff — Friday, April 19, 2002

    ETF investors should know that a big rebalancing is on the horizon for the Select Sector SPDRs. On June 24 the nine Select Sector SPDRs will rebalance to look more like the ten Global Industry Classification ...Read More

  • Editors' Picks - US Total Market

    by Staff — Wednesday, April 17, 2002

    We believe it is self-evident that portfolios should start with the domestic total market fund for that portion of the portfolio that is intended to mirror, for the long-term, the total market on a ...Read More

  • Large Value Editors' Picks

    by Staff — Wednesday, April 17, 2002 preferred large value funds are as follows. Click on any fund name for more details, the funds are not listed in order of ...Read More

  • Editors' Index Fund Picks, by Asset Class

    by Staff — Wednesday, April 17, 2002

    We at feel it is high time we begin to separate the wheat from the chaff. With some firms charging 4% loads and 1% annual fees on S&P 500 index funds, there is a penalty for not choosing ...Read More

  • Mid-Cap Blend Editors' Picks

    by Staff — Wednesday, April 17, 2002's preferred mid-cap blend funds are as follows. Click on any fund name for more details, the funds are not listed in order of ...Read More

  • Small-Cap Blend Editors' Picks

    by Staff — Wednesday, April 17, 2002

    Small-cap blend funds are a favorite way to diversify a portfolio heavy with S&P stocks. Some of our favorites are as follows. Click on any fund name for more details, the funds are not listed in order of ...Read More

  • No Entry or Exit Fees: Another advantage of ETFs

    by Richard Evans — Thursday, April 11, 2002

    Some critics of exchange-traded funds (ETFs) say you can get the same cost and tax advantages by using conventional index funds, especially at Vanguard. Long the king of index funds, Vanguard has about 24 of ...Read More

  • John Spence

    UBS Asset Management Licenses Morningstar Indexes

    by John Spence — Thursday, April 11, 2002

    Long known as a sideline mutual fund tracker and commentator, Morningstar is set to enter the industry as an active participant in the role of index licensor. UBS Global Asset Management said today that it ...Read More

  • New Generation Of Tax Managed Funds

    by Frank Armstrong — Monday, April 8, 2002

    A third generation of tax managed index funds adds dividend management to capital gains management, enhancing the already formidable tax advantages that passive funds offer to investors. These new funds take ...Read More

  • John Spence

    Optimizing Indexed Portfolios

    by John Spence — Thursday, April 4, 2002

    In many cases, holding every stock in an index isn't cost effective. One reason is that some thinly traded securities, such as small-cap or international stocks, are illiquid and carry higher transaction costs ...Read More

  • John Spence

    A Chat with a Socially Responsible Fund Manager

    by John Spence — Thursday, April 4, 2002

    Steve Dillenburg is the lead manager of the Summit Total Social Impact (SATSX) fund, an offering that is truly unique in the socially responsible fund world. The TSI fund invests in all of the stocks in the ...Read More

  • Another Look at ETF Premium/Discounts and Spreads

    by Staff — Wednesday, April 3, 2002

    As we noted in a previous article, the liquidity of an exchange-traded fund is not always best measured by the historical trading volume of the fund. A better gauge of an ETF's liquidity is the liquidity of ...Read More

  • March Wrap-Up

    by Staff — Monday, April 1, 2002

    The S&P 500 inched slightly forward in the first quarter of 2002, while small-cap and value indexes moved ahead of the pack. On the other hand, most growth indexes across market capitalizations are in the red ...Read More

  • The Dimensions of Stock Returns: 2002 Update

    by Truman Clark — Monday, April 1, 2002

    Based on the limited amount of data available, size and value effects also appear in emerging markets. The IFC Investables Total Return Index represents a portfolio of tradable stocks in emerging markets ...Read More

  • Morningstar Broadens Style Box Methodology

    by Staff — Tuesday, March 26, 2002

    Morningstar, the Chicago-headquartered fund tracker, said it is updating the methodology it uses to pigeonhole mutual funds in its popular style boxes. Like passive index funds, style boxes are a tool long ...Read More

  • John Spence

    Clearing Up an ETF Liquidity Myth

    by John Spence — Wednesday, March 20, 2002

    We thought it was time to put a common misconception on exchange-traded fund liquidity to rest. Some investors appear to believe that the liquidity of an ETF is dependent on the fund's average trading volume, ...Read More

  • What Makes A Good Mutual Fund?

    by Frank Armstrong — Monday, March 18, 2002

    As you build your portfolio, once you have decided on your asset allocation between stocks and bonds, and then picked your investment categories within the equity markets, it's time to select the mutual fund ...Read More

  • Big Board to Trade ETFs and HOLDRs Under UTP

    by Staff — Wednesday, March 13, 2002

    The New York Stock Exchange said it will soon begin trading 17 HOLDRs and 10 exchange-traded funds on the basis of unlisted trading privileges (UTP). All 27 of these funds are listed on the American Stock ...Read More

  • Larry Swedroe

    Does Indexing Affect Stock Prices?

    by Larry Swedroe — Tuesday, March 12, 2002

    Index mutual funds have become the villains of an investment soap opera. Active managers have been blaming their underperformance on S&P 500 Index funds. The theory goes like this: money pours into the index ...Read More

  • Ten-Year Risk and Return of Several Popular Indexes

    by Staff — Thursday, March 7, 2002

    Asset allocation is certainly no simple task, but it's a little easier for passive investors as far as choosing funds. The reason is that indexers aren't concerned with finding the best manager in an asset ...Read More

  • Stocks, Bonds and REITs

    by Daniel Fisher — Monday, March 4, 2002

    Investors have been considering real estate as a useful portfolio component for quite a while. Recently I saw the following quote in Roger Gibson's book, Asset Allocation: Balancing Financial Risk: "Let every ...Read More

  • April Wrap-Up

    by Staff — Saturday, March 2, 2002

    Here's how major equity indexes fared in April 2002, broken down by index ...Read More

  • February Major Index Returns

    by Staff — Friday, March 1, 2002

    The Dow Jones Industrial Average was in the black for the month of February. Internationally, the Dow Jones indexes that cover world and European markets were down, while Asia closed up in ...Read More

  • FTSE and HSI Team Up to Launch Asian Equity Indexes

    by Staff — Wednesday, February 27, 2002

    Index providers FTSE and Hang Seng Indexes (HSI) International are getting together to launch a broad index that tracks the Asian economy (minus Japan), as well as sector indexes that cover the area. The new ...Read More

  • State Street and Unico to Introduce ETFs in Germany

    by Staff — Monday, February 25, 2002

    In a nod to the growing popularity of exchange-traded funds in Europe, Frankfurt-based Unico Asset Management announced that Boston-headquartered indexing behemoth State Street Global Advisors will manage and ...Read More

  • Websites Roll Out More Snazzy Tools

    by Staff — Friday, February 22, 2002

    With good reason, all the talking heads are buzzing about asset allocation and diversification these days, and more Internet tools geared to do-it-yourself investors are cropping up. Three new gizmos of ...Read More

  • John Spence

    Bogle Calls for Federation of Long-Term Investors

    by John Spence — Thursday, February 21, 2002

    Like Woodrow Wilson laying out his vision of a League of Nations after World War I, Vanguard founder John C. Bogle has called for a "Federation of Long-Term Investors" in the wake of the late 1990s speculative ...Read More

  • News Roundup

    by Staff — Tuesday, February 19, 2002

    The Vanguard Group today launched the Single 5 fixed annuity, which will be underwritten by Jefferson Pilot LifeAmerica Insurance Company. The new annuity offers a guaranteed fixed rate of return over the ...Read More

  • KLD and Nasdaq Launch New Socially Responsible Index

    by Staff — Wednesday, February 13, 2002

    Think Nasdaq "cubes" for investors with a conscience. Boston-based KLD Research & Analytics and the Nasdaq stock market introduced a new socially responsible index of companies trading on the tech-heavy ...Read More

  • Larry Swedroe

    Explaining The Value Premium

    by Larry Swedroe — Monday, February 11, 2002

    The historical evidence is that there is a very strong and persistent value premium. From 1964 to 2000 large value stocks outperformed large growth stocks 14.5 percent to 11.1 percent, and small value stocks ...Read More

  • News Roundup

    by Staff — Monday, February 4, 2002

    A new study by Lipper estimates mutual fund shareholders coughed up $11 billion in shareholder-servicing expenses in 2001. According to Lipper, the average shareholder pays 2.8% of assets for services like ...Read More