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Ten-Year Risk and Return of Several Popular Indexes

4,987
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

Article Library

  • John Spence

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

    4,832
    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

    5,877
    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

    5,866
    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

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    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

    5,153
    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

    5,045
    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

    4,856
    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

    4,805
    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

    4,947
    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

    4,976
    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

    5,085
    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

    5,948
    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

    4,691
    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

    7,059
    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

    4,898
    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

    5,122
    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

    5,051
    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

    5,434
    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

    5,119
    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

    5,077
    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

    5,575
    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

    5,813
    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

    5,559
    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

    5,044
    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

    5,582
    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

    5,048
    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"

    5,089
    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

    5,063
    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

    5,027
    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

    5,279
    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

    5,225
    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

    5,678
    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

  • The Error Term

    6,466
    by Eugene Fama Jr. — Saturday, December 1, 2001

    Both cases have the same factor exposures and the same expected returns as the market. Cases 1 and 2, however, have significantly higher after-tax expected returns, especially in periods where dividend yields are high. In 1991, for instance, simulated ...Read More

  • Being Socially Responsible All The Rage

    4,776
    by IndexFunds.com Staff — Wednesday, November 28, 2001

    Assets in socially responsible funds have continued to rise dramatically. According to a new report by the Social Investment Forum, assets under management in socially screened portfolios have topped $2 trillion. In the past two years, socially ...Read More

  • Will McClatchy

    ETFs for the Buy-and-Hold Investor

    5,155
    by Will McClatchy — Wednesday, November 21, 2001

    The buy-and-hold investor has as much to gain from ETFs as anyone. While media hoopla has focused on day traders using ETF, in reality ETFs' greatest strengths lie in their long-term features. Especially when purchasing an index-oriented product, over ...Read More

  • Larry Swedroe

    Risk and Expected Return

    7,093
    by Larry Swedroe — Tuesday, November 20, 2001

    The last half of the twentieth century was a golden era for US equity investors. From 1950 through 1999 the S&P 500 Index produced annualized returns of 13.6% per annum, or a real rate of 9.2% per annum. Even more impressive are the returns of the last ...Read More

  • Forbes Recognizes IndexFunds.com and ETFzone as Best of Web

    5,128
    by IndexFunds.com Staff — Saturday, November 17, 2001

    Both the IndexFunds.com site and its ETFzone were awarded Best of the Web, with the IndexFunds.com site finishing 4th out of 20 sites in the Fund Selection category and the ETFzone also being awarded Best of the Web in the Exchange-Traded Fund category. ...Read More

  • iShares Global Sector Funds hit the Market

    5,102
    by IndexFunds.com Staff — Friday, November 16, 2001

    iShares continued its enthusiastic global expansion with the launch of the world's first global sector funds. The funds began trading today (11/16/2001) and cover global technology, telecom, energy, financials and healthcare sectors. They are based on ...Read More

  • iShares Make Strong Gains as VIPERs Crack $1 Billion

    4,791
    by IndexFunds.com Staff — Friday, November 16, 2001

    ETF assets soared in the previous 2 weeks in a strengthening market that was coupled with strong investor interest in ETFs. The iShares continued their recent boom, with all of the top iShares funds enjoying significant gains. iShare's breakthrough 35 bp ...Read More

  • Larry Swedroe

    The Road Less Travelled

    5,427
    by Larry Swedroe — Wednesday, November 14, 2001

    As they begin their journey, investors are faced with an immediate fork in the road-the choice between an active and a passive management strategy. Given the substantial body of evidence it seems clear that passive investing is the strategy most likely to ...Read More

  • Jim Wiandt

    ETF Regulatory and Tax Complications

    5,430
    by Jim Wiandt — Friday, November 9, 2001

    Many of the early developers of ETFs say that it took a miraculous convergence of determination and circumstance to ultimately garner the approval of the SEC and get the new products off the ground. The basic structure of ETFs runs counter to some ...Read More

  • The Societal Risk Premium

    5,423
    by William Bernstein — Thursday, November 8, 2001

    Financial economists like to talk about the risk-free rate: basically, the time value of money sitting in a perfectly safe vehicle. From an historical perspective per se, the very use of the term is fascinating. After all, it implies a society that is ...Read More

  • Jim Wiandt

    Let The Commenting Begin

    5,862
    by Jim Wiandt — Wednesday, November 7, 2001

    The SEC today announced the long-awaited issuance of its concept release on actively managed exchange-traded funds (ETFs). Actively-managed ETFs increasingly threaten to invade the realm of ETFs, a space presently occupied only by index funds. The AMEX ...Read More

  • Fed Rates Lowered by Another Half Percent

    5,015
    by IndexFunds.com Staff — Tuesday, November 6, 2001

    Reacting to an economy that has slid into recession, the Fed lowered interest rates by another 50 basis points (0.50%) to 2%. Stocks climbed on the news. The Fed rates are now at a 40-year low. The move market the first time the rate had slid as low as 2% ...Read More