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John Spence

A Chat with a Socially Responsible Fund Manager

5,061
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 S&P 500, but it weights the companies ...Read More

Article Library

  • Another Look at ETF Premium/Discounts and Spreads

    5,231
    by IndexFunds.com 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 the underlying stocks in the index. ...Read More

  • March Wrap-Up

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    by IndexFunds.com 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 so far this ...Read More

  • The Dimensions of Stock Returns: 2002 Update

    4,809
    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 countries that non-resident investors are permitted ...Read More

  • Morningstar Broadens Style Box Methodology

    5,480
    by IndexFunds.com 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 favored by institutional investors that have gone ...Read More

  • John Spence

    Clearing Up an ETF Liquidity Myth

    5,670
    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, or the number of shares traded per day. ...Read More

  • What Makes A Good Mutual Fund?

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    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 for each category. With over 7,000 domestic ...Read More

  • Big Board to Trade ETFs and HOLDRs Under UTP

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    by IndexFunds.com 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 Exchange, and the move represents the second time ...Read More

  • Larry Swedroe

    Does Indexing Affect Stock Prices?

    6,057
    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 funds because of the dissatisfaction with the ...Read More

  • John Spence

    Small Investors Frustrated by AMEX ETF Trading Glitch

    5,186
    by John Spence — Tuesday, March 12, 2002

    Some individual investors are reporting difficulties purchasing small odd lots of exchange-traded fund shares using limit orders on the American Stock Exchange. Odd-lot limits refer to priced orders for less than the unit of a trade (typically less than ...Read More

  • Ten-Year Risk and Return of Several Popular Indexes

    5,323
    by IndexFunds.com 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 class - they simply invest in the index fund or ...Read More

  • John Spence

    Ten-Year Risk and Return of Equity Asset Classes by Index

    5,150
    by John Spence — Tuesday, March 5, 2002

    Most of the experts will tell you that a diversified equity portfolio is comprised of funds from the various asset classes, which are separated in terms of size and style. The idea is to build a broad base of funds that will hold up over the long haul and ...Read More

  • Stocks, Bonds and REITs

    6,207
    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 man divide his money into three parts, and ...Read More

  • April Wrap-Up

    6,135
    by IndexFunds.com 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

    6,254
    by IndexFunds.com 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

  • John Spence

    Back to Boot Camp: Ben Graham's Take on Mutual Funds

    5,509
    by John Spence — Thursday, February 28, 2002

    So we've got the whole Enron mess clogging up the headlines. John Bogle says things are so bad that the mutual fund industry, which controls a majority of stock in America's corporations, must break its traditional silence and actively speak out on ...Read More

  • FTSE and HSI Team Up to Launch Asian Equity Indexes

    5,345
    by IndexFunds.com 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 benchmarks will go live ...Read More

  • John Spence

    Morningstar Study Reinforces the Importance of Fund Costs

    5,172
    by John Spence — Wednesday, February 27, 2002

    Chicago fund-tracker Morningstar wrapped up a study that examines the importance of fund costs on an investor's bottom line. Although the study looked only at actively managed domestic equity funds, the results should provide further encouragement to ...Read More

  • State Street and Unico to Introduce ETFs in Germany

    5,109
    by IndexFunds.com 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 service seven new Unico i-tracker ETFs. ...Read More

  • Websites Roll Out More Snazzy Tools

    5,282
    by IndexFunds.com 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 interest made their debut today, so let's take a ...Read More

  • John Spence

    Bogle Calls for Federation of Long-Term Investors

    5,240
    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 bubble, Enron, and a crisis in American ...Read More

  • HOLDRs Creation and Redemption Fees Temporarily Reduced

    5,418
    by IndexFunds.com Staff — Wednesday, February 20, 2002

    The American Stock Exchange today sent out a notice that the Bank of New York has instituted a new fee structure for the issuance and cancellation of all HOLDRs. Bank of NY is temporarily waiving all of the issuance fees for HOLDRs, while the cancellation ...Read More

  • News Roundup

    6,232
    by IndexFunds.com 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 first five years and annual fixed interest rates ...Read More

  • KLD and Nasdaq Launch New Socially Responsible Index

    5,015
    by IndexFunds.com 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 exchange that lists over 4,100 securities. The new ...Read More

  • Larry Swedroe

    Explaining The Value Premium

    7,504
    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 outperformed small growth stocks 16.6 percent ...Read More

  • John Spence

    A Possible Antidote to Index Front-Runners: Secret Indexes

    5,216
    by John Spence — Friday, February 8, 2002

    One of the biggest knocks against index funds is that they foster the so-called "index effect." This occurs when a stock is added to or removed from a well-known index like the S&P 500 or Russell 2000, and it is costly to investors. The company that is ...Read More

  • News Roundup

    5,430
    by IndexFunds.com 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 online research tools, telephone representative ...Read More

  • News Roundup: Latest ETF Launches, New Vanguard Online Tools

    5,371
    by IndexFunds.com Staff — Tuesday, January 29, 2002

    The iShares FTSE Eurotop 100 began trading yesterday on the London Stock Exchange. The exchange-traded fund, which has an expense ratio of 0.50%, holds the largest 100 companies and protects United Kingdom shareholders from damaging currency transaction ...Read More

  • Will McClatchy

    Active Fund Trading Costs Remain High

    5,721
    by Will McClatchy — Tuesday, January 22, 2002

    Many individual investors believe that professionally managed funds have a trading cost advantage over them, but this is not the case. A recent study suggests that smaller volume traders have gained the most from recently shrinking commissions and smaller ...Read More

  • John Spence

    An ETF Cheat Sheet for Major Domestic Stock Categories

    5,438
    by John Spence — Tuesday, January 15, 2002

    Exchange-traded funds (ETFs) make great tools for building a a reasonably diversified portfolio of U.S. stocks on the cheap, particularly for those making lump sum investments. However, with 102 domestic ETFs trading at last count, some investors may feel ...Read More

  • John Spence

    SEC Reviewing Actively Managed ETFs

    5,366
    by John Spence — Thursday, January 10, 2002

    Not one of the currently 102 exchange-traded funds (ETFs) listed in the United States holding over $70 billion of assets in their coffers is actively traded. All are linked to equity benchmarks from the popular index providers such as Dow Jones, Russell, ...Read More

  • Vanguard Extended Market ETF Launches

    5,956
    by IndexFunds.com Staff — Friday, January 4, 2002

    Vanguard Extended Market VIPERs, the exchange-traded fund to track the Wilshire 4500 Completion Index, will begin trading on January 4, 2002, on the American Stock Exchange under the symbol VXF. Vanguard Extended Market VIPERs (for Vanguard Index ...Read More

  • Mind Your Q's

    6,099
    by Max Issacman — Friday, January 4, 2002

    By far the most popular exchange traded fund (ETF) is the one that tracks the Nasdaq-100 Index, symbol QQQ. It has been this way since the Qs made their first appearance on March 10, 1999. On that day alone the assets grew from an asset base of about $15 ...Read More

  • Larry Swedroe

    Never In Doubt, Often Wrong

    5,880
    by Larry Swedroe — Wednesday, January 2, 2002

    Economists, if they are smart, learn to never make forecasts, especially about the future. If they have to make a forecast, they learn to never give a number. And, if they have to give a number, they learn to never give a date. In that way they can never ...Read More

  • John Spence

    News Roundup: Amex and Bank of New York

    5,287
    by John Spence — Monday, December 31, 2001

    Investors who use options to hedge portfolio risk got some welcome new tools for the chest. This week the American Stock Exchange (AMEX) began trading options on six iShares managed by Barclays Global Investors tied to the following ...Read More

  • Will McClatchy

    Index Tracking is a Secondary Goal

    5,887
    by Will McClatchy — Sunday, December 23, 2001

    As investors examine year-end performances of their index funds, one measure they should not focus on too closely is tracking error. Keeping a portfolio reasonably close to its intended index is desirable, but experts caution against zealous efforts to ...Read More

  • News Roundup: Nasdaq ETF; Barclays & Vanguard Distributions

    5,361
    by IndexFunds.com Staff — Monday, December 17, 2001

    The Nasdaq Exchange is looking to capitalize on the popularity of the Nasdaq-100 Tracking Stock (QQQ), an exchange-traded fund listed on the American Stock Exchange (AMEX). Nasdaq has plans to launch its own ETF based on the Nasdaq Composite Index, ...Read More

  • Will McClatchy

    Glimpse of "Convergence to Efficiency"

    5,367
    by Will McClatchy — Thursday, December 13, 2001

    A new study "Evidence on the Speed of Convergence to Market Efficiency" by Prof. Richard Roll of UCLA and colleagues demonstrates just how quickly competition squeezes out easy profits and offers glimpses of the complexity of equity ...Read More

  • Tax Loss Selling Using Exchange Traded Funds

    5,351
    by Russ MacKay — Tuesday, December 11, 2001

    Tax loss selling has been an effective tax management tool used by savvy investors and portfolio managers for years. The concept is quite simple. You sell investment(s) that are in a loss position, and apply those realized losses against realized gains, ...Read More

  • Vanguard Issues Updated Capital Gain Distribution Estimates

    5,305
    by IndexFunds.com Staff — Friday, December 7, 2001

    The Vanguard Group released updated realized capital gain figures today for its funds to assist investors with year-end tax and investment planning. The firm expects that 70% of its funds (57 funds in all) will not make capital gain distributions for ...Read More

  • Larry Swedroe

    The Enron Debacle: Lessons To Be Learned

    5,598
    by Larry Swedroe — Friday, December 7, 2001

    In December 2000, with its stock trading at a peak of $85 per share, Enron had a market capitalization of over $60 billion, making it one of the largest U.S. companies. Less than one year later, with the stock trading at well under $1 per share, the ...Read More

  • Will McClatchy

    Bogle Cautions Indexers on ETF Speculation

    5,559
    by Will McClatchy — Wednesday, December 5, 2001

    Vanguard's founder denounced the speculative appeal of exchange traded funds before the largest annual US gathering of indexing faithful, who took the message to heart but felt that it understated how speculative interest benefits the long-term ...Read More

  • Explaining Stock Returns: A Literature Survey

    6,056
    by James Davis — Saturday, December 1, 2001

    Daniel and Titman (1997) doubt the risk-based explanation. They contend that it is "characteristics, not covariances," that produce return dispersion. For example, the risk-based story says that high BtM stocks have high average returns because they are ...Read More