Exploring Energetic vs. Passive in Latin America – Indexology® Weblog

{“web page”:0,”yr”:2022,”monthnum”:12,”day”:7,”identify”:”exploring-active-vs-passive-in-latin-america”,”error”:””,”m”:””,”p”:0,”post_parent”:””,”subpost”:””,”subpost_id”:””,”attachment”:””,”attachment_id”:0,”pagename”:””,”page_id”:0,”second”:””,”minute”:””,”hour”:””,”w”:0,”category_name”:””,”tag”:””,”cat”:””,”tag_id”:””,”creator”:””,”author_name”:””,”feed”:””,”tb”:””,”paged”:0,”meta_key”:””,”meta_value”:””,”preview”:””,”s”:””,”sentence”:””,”title”:””,”fields”:””,”menu_order”:””,”embed”:””,”category__in”:[],”category__not_in”:[],”category__and”:[],”post__in”:[],”post__not_in”:[],”post_name__in”:[],”tag__in”:[],”tag__not_in”:[],”tag__and”:[],”tag_slug__in”:[],”tag_slug__and”:[],”post_parent__in”:[],”post_parent__not_in”:[],”author__in”:[],”author__not_in”:[],”ignore_sticky_posts”:false,”suppress_filters”:false,”cache_results”:true,”update_post_term_cache”:true,”lazy_load_term_meta”:true,”update_post_meta_cache”:true,”post_type”:””,”posts_per_page”:”5″,”nopaging”:false,”comments_per_page”:”50″,”no_found_rows”:false,”order”:”DESC”}

[{“display”:”Craig Lazzara”,”title”:”Managing Director, Core Product Management”,”image”:”/wp-content/authors/craig_lazzara-353.jpg”,”url”:”https://www.indexologyblog.com/author/craig_lazzara/”},{“display”:”Fei Mei Chan”,”title”:”Director, Core Product Management”,”image”:”/wp-content/authors/feimei_chan-214.jpg”,”url”:”https://www.indexologyblog.com/author/feimei_chan/”},{“display”:”Tim Edwards”,”title”:”Managing Director, Index Investment Strategy”,”image”:”/wp-content/authors/timothy_edwards-368.jpg”,”url”:”https://www.indexologyblog.com/author/timothy_edwards/”},{“display”:”Hamish Preston”,”title”:”Director, U.S. Equity Indices”,”image”:”/wp-content/authors/hamish_preston-436.jpg”,”url”:”https://www.indexologyblog.com/author/hamish_preston/”},{“display”:”Berlinda Liu”,”title”:”Director, Multi-Asset Indices”,”image”:”/wp-content/authors/berlinda_liu-191.jpg”,”url”:”https://www.indexologyblog.com/author/berlinda_liu/”},{“display”:”Fiona Boal”,”title”:”Head of Commodities and Real Assets”,”image”:”/wp-content/authors/fiona_boal-317.jpg”,”url”:”https://www.indexologyblog.com/author/fiona_boal/”},{“display”:”Anu Ganti”,”title”:”Senior Director, Index Investment Strategy”,”image”:”/wp-content/authors/anu_ganti-349.jpg”,”url”:”https://www.indexologyblog.com/author/anu_ganti/”},{“display”:”Jim Wiederhold”,”title”:”Director, Commodities and Real Assets”,”image”:”/wp-content/authors/jim.wiederhold-380.jpg”,”url”:”https://www.indexologyblog.com/author/jim-wiederhold/”},{“display”:”Koel Ghosh”,”title”:”Head of South Asia”,”image”:”/wp-content/authors/koel_gosh-372.jpeg”,”url”:”https://www.indexologyblog.com/author/koel_gosh/”},{“display”:”Phillip Brzenk”,”title”:”Head of Multi-Asset Indices”,”image”:”/wp-content/authors/phillip_brzenk-325.jpg”,”url”:”https://www.indexologyblog.com/author/phillip_brzenk/”},{“display”:”Aye Soe”,”title”:”Managing Director, Global Head of Core and Multi-Asset Product Management”,”image”:”/wp-content/authors/aye_soe-350.jpg”,”url”:”https://www.indexologyblog.com/author/aye_soe/”},{“display”:”Howard Silverblatt”,”title”:”Senior Index Analyst, Product Management”,”image”:”/wp-content/authors/howard_silverblatt-197.jpg”,”url”:”https://www.indexologyblog.com/author/howard_silverblatt/”},{“display”:”Michael Orzano”,”title”:”Senior Director, Global Equity Indices”,”image”:”/wp-content/authors/Mike.Orzano-231.jpg”,”url”:”https://www.indexologyblog.com/author/mike-orzano/”},{“display”:”John Welling”,”title”:”Director, Global Equity Indices”,”image”:”/wp-content/authors/john_welling-246.jpg”,”url”:”https://www.indexologyblog.com/author/john_welling/”},{“display”:”Maria Sanchez”,”title”:”Director, ESG Index Product Strategy, Latin America”,”image”:”/wp-content/authors/maria_sanchez-243.jpg”,”url”:”https://www.indexologyblog.com/author/maria_sanchez/”},{“display”:”Wenli Bill Hao”,”title”:”Senior Lead, Strategy Indices”,”image”:”/wp-content/authors/bill_hao-351.jpg”,”url”:”https://www.indexologyblog.com/author/bill_hao/”},{“display”:”Reid Steadman”,”title”:”Managing Director, Global Head of ESG & Innovation”,”image”:”/wp-content/authors/reid_steadman-328.jpg”,”url”:”https://www.indexologyblog.com/author/reid_steadman/”},{“display”:”Shaun Wurzbach”,”title”:”Managing Director, Head of Commercial Group (North America)”,”image”:”/wp-content/authors/shaun_wurzbach-200.jpg”,”url”:”https://www.indexologyblog.com/author/shaun_wurzbach/”},{“display”:”Silvia Kitchener”,”title”:”Director, Global Equity Indices, Latin America”,”image”:”/wp-content/authors/silvia_kitchener-271.jpg”,”url”:”https://www.indexologyblog.com/author/silvia_kitchener/”},{“display”:”Akash Jain”,”title”:”Director, Global Research & Design”,”image”:”/wp-content/authors/akash_jain-348.jpg”,”url”:”https://www.indexologyblog.com/author/akash_jain/”},{“display”:”Ved Malla”,”title”:”Associate Director, Client Coverage”,”image”:”/wp-content/authors/ved_malla-347.jpg”,”url”:”https://www.indexologyblog.com/author/ved_malla/”},{“display”:”Jaime Merino”,”title”:”Director, Asset Owners Channel”,”image”:”/wp-content/authors/jaime_merino-384.jpg”,”url”:”https://www.indexologyblog.com/author/jaime_merino/”},{“display”:”Rupert Watts”,”title”:”Senior Director, Strategy Indices”,”image”:”/wp-content/authors/rupert_watts-366.jpg”,”url”:”https://www.indexologyblog.com/author/rupert_watts/”},{“display”:”Jason Giordano”,”title”:”Director, Fixed Income, Product Management”,”image”:”/wp-content/authors/jason_giordano-378.jpg”,”url”:”https://www.indexologyblog.com/author/jason_giordano/”},{“display”:”Qing Li”,”title”:”Director, Global Research & Design”,”image”:”/wp-content/authors/qing_li-190.jpg”,”url”:”https://www.indexologyblog.com/author/qing_li/”},{“display”:”Ben Leale-Green”,”title”:”Associate Director, Research & Design, ESG Indices”,”image”:”/wp-content/authors/ben_leale-green-342.jpg”,”url”:”https://www.indexologyblog.com/author/ben_leale-green/”},{“display”:”Priscilla Luk”,”title”:”Managing Director, Global Research & Design, APAC”,”image”:”/wp-content/authors/priscilla_luk-228.jpg”,”url”:”https://www.indexologyblog.com/author/priscilla_luk/”},{“display”:”Liyu Zeng”,”title”:”Director, Global Research & Design”,”image”:”/wp-content/authors/liyu_zeng-252.png”,”url”:”https://www.indexologyblog.com/author/liyu_zeng/”},{“display”:”Sharon Liebowitz”,”title”:”Head of Innovation”,”image”:”/wp-content/authors/sharon_liebowitz-423.jpg”,”url”:”https://www.indexologyblog.com/author/sharon_liebowitz/”},{“display”:”Brian Luke”,”title”:”Senior Director, Head of Fixed Income Indices – Americas”,”image”:”/wp-content/authors/brian.luke-344.png”,”url”:”https://www.indexologyblog.com/author/brian-luke/”},{“display”:”Andrew Innes”,”title”:”Head of EMEA, Global Research & Design”,”image”:”/wp-content/authors/andrew_innes-189.jpg”,”url”:”https://www.indexologyblog.com/author/andrew_innes/”},{“display”:”Barbara Velado”,”title”:”Senior Analyst, Research & Design, ESG Indices”,”image”:”/wp-content/authors/barbara_velado-413.jpg”,”url”:”https://www.indexologyblog.com/author/barbara_velado/”},{“display”:”Michael Mell”,”title”:”Senior Director, Custom Indices”,”image”:”/wp-content/authors/michael_mell-362.jpg”,”url”:”https://www.indexologyblog.com/author/michael_mell/”},{“display”:”Sherifa Issifu”,”title”:”Senior Analyst, U.S. Equity Indices”,”image”:”/wp-content/authors/sherifa_issifu-373.jpg”,”url”:”https://www.indexologyblog.com/author/sherifa_issifu/”},{“display”:”Izzy Wang”,”title”:”Analyst, Strategy Indices”,”image”:”/wp-content/authors/izzy.wang-326.jpg”,”url”:”https://www.indexologyblog.com/author/izzy-wang/”},{“display”:”Rachel Du”,”title”:”Senior Analyst, Global Research & Design”,”image”:”/wp-content/authors/rachel_du-365.jpg”,”url”:”https://www.indexologyblog.com/author/rachel_du/”},{“display”:”Benedek Vu00f6ru00f6s”,”title”:”Director, Index Investment Strategy”,”image”:”/wp-content/authors/benedek_voros-440.jpg”,”url”:”https://www.indexologyblog.com/author/benedek_voros/”},{“display”:”Jason Ye”,”title”:”Director, Strategy Indices”,”image”:”/wp-content/authors/Jason%20Ye-448.jpg”,”url”:”https://www.indexologyblog.com/author/jason-ye/”},{“display”:”Jaspreet Duhra”,”title”:”Managing Director, Global Head of ESG Indices”,”image”:”/wp-content/authors/jaspreet_duhra-454.jpg”,”url”:”https://www.indexologyblog.com/author/jaspreet_duhra/”},{“display”:”Daniel Perrone”,”title”:”Director and Head of Operations, ESG Indices”,”image”:”/wp-content/authors/daniel_perrone-387.jpg”,”url”:”https://www.indexologyblog.com/author/daniel_perrone/”},{“display”:”Cristopher Anguiano”,”title”:”Senior Analyst, U.S. Equity Indices”,”image”:”/wp-content/authors/cristopher_anguiano-421.jpg”,”url”:”https://www.indexologyblog.com/author/cristopher_anguiano/”},{“display”:”Ari Rajendra”,”title”:”Senior Director, Strategy & Volatility Indices”,”image”:”/wp-content/authors/Ari.Rajendra-400.jpg”,”url”:”https://www.indexologyblog.com/author/ari-rajendra/”},{“display”:”Sean Freer”,”title”:”Director, Global Equity Indices”,”image”:”/wp-content/authors/sean_freer-490.jpg”,”url”:”https://www.indexologyblog.com/author/sean_freer/”},{“display”:”Louis Bellucci”,”title”:”Senior Director, Index Governance”,”image”:”/wp-content/authors/louis_bellucci-377.jpg”,”url”:”https://www.indexologyblog.com/author/louis_bellucci/”},{“display”:”George Valantasis”,”title”:”Associate Director, Strategy Indices”,”image”:”/wp-content/authors/george-valantasis-453.jpg”,”url”:”https://www.indexologyblog.com/author/george-valantasis/”}]

Exploring Energetic vs. Passive in Latin America

Contributor Image

How do lively managers in Latin America stack as much as their benchmarks? Uncover the important thing takeaways from the most recent SPIVA Latin America Scorecard with S&P DJI’s Tim Edwards and Ericka Alcántara.

The posts on this weblog are opinions, not recommendation. Please learn our Disclaimers.

S&P ESG Excessive Yield Dividend Aristocrats Index – Including a Layer of Sustainability through ESG Screening

Contributor Image

Excessive-dividend-yielding shares have been prevalent in 2022, as rising rates of interest have put downward stress on lengthy length property. On the identical time, market members are more and more in search of to align investments with their private and societal values. The S&P ESG Excessive Yield Dividend Aristocrats® Index could also be a method that checks each of those bins. Launched in March 2021, this index strives to attain low monitoring error and comparable dividend yield to the S&P Excessive Yield Dividend Aristocrats Index whereas incorporating significant ESG enchancment.

Combining Dividend Aristocrats and ESG Methodology

The S&P ESG Excessive Yield Dividend Aristocrats Index combines the S&P Dividend Aristocrats methodology with a sustainability overlay. To qualify for the index, an organization should first have persistently elevated dividends yearly for at the least 20 years. This preliminary filter tilts the index towards deciding on higher-quality firms, for the reason that potential to persistently develop dividends over an extended time frame will be a sign of economic power, self-discipline and sturdy incomes energy.

Subsequent, a number of ESG screens are utilized. The index excludes firms within the lowest quartile of S&P DJI ESG Scores. Further ESG exclusion evaluations are carried out quarterly primarily based on enterprise actions, in addition to United Nations International Compact (UNGC) breaches. These ESG screens serve to reinforce the already stringent {qualifications} of the Dividend Aristocrats methodology.


Since January 2011, the S&P ESG Excessive Yield Dividend Aristocrats Index has generated a 12.92% annualized return versus 11.87% for the S&P 1500TM, whereas exhibiting much less volatility.

Just lately, the outperformance of the S&P ESG Excessive Yield Dividend Aristocrats Index versus the S&P 1500 has been much more pronounced. 12 months-to-date, the S&P ESG Excessive Yield Dividend Aristocrats Index has outperformed the benchmark by 15.25%. One motive for that is that high-yielding indices, primarily by means of their decrease durations, supplied larger safety towards quickly rising rates of interest in comparison with the benchmark.

Comparability of S&P DJI ESG Scores and Dividend Yields

Exhibit 3 exhibits that the S&P ESG Excessive Yield Dividend Aristocrats Index supplied notable S&P DJI ESG Rating enchancment over the S&P Excessive Yield Dividend Aristocrats Index. The S&P DJI ESG Rating improved by 11 factors per yr on common, revealing an annual improve of over 20%.

The S&P ESG Excessive Yield Dividend Aristocrats Index and S&P Excessive Yield Dividend Aristocrats Index have had comparable yields traditionally, and each have held a big yield benefit over the S&P 1500 (see Exhibit 4). Over the interval examined, the typical annual dividend yields for the S&P ESG Excessive Yield Dividend Aristocrats Index, S&P Excessive Yield Dividend Aristocrats Index and S&P 1500 had been 2.73%, 2.88% and 1.84%, respectively.

Exhibit 5 exhibits the typical year-over-year annual proportion dividend development charge for present S&P ESG Excessive Yield Dividend Aristocrats Index constituents. The common year-over-year dividend development charge over the previous 20 years was 11.26%, far surpassing the typical year-over-year U.S. CPI charge of two.35% over the identical interval.


For market members who’re on the lookout for high-quality firms that align with their private values, in addition to a historical past of secure and engaging dividend funds, the S&P ESG Excessive Yield Dividend Aristocrats Index could also be an possibility to contemplate.

The posts on this weblog are opinions, not recommendation. Please learn our Disclaimers.

Diversification Past Borders

Contributor Image

Tutorial theorists typically assert the choice of the place to speculate as extra vital than the choice of what to speculate in. Research recommend that as much as 90% of funding returns are attributable to location.

Regional fairness indices symbolize totally different mixtures of geographic and sector publicity. These variations can doubtlessly enhance the diversification advantages obtainable when combining indices. We examine the underlying sector and geographical income exposures of two S&P DJI regional indices and present that using mixtures of fairness indices might enhance an investor’s danger/return potential, in addition to cut back dwelling bias (an anomaly whereby asset allocators obese their home inventory market).

What Is the S&P 500®?

Broadly thought of the first gauge of the U.S. large-cap inventory market, the S&P 500 is a float-adjusted, market-capitalization-weighted index that displays 500 of the most important, most well-known firms domiciled within the U.S. The index incorporates a variety of inclusion standards, together with a profitability display screen. The S&P 500 represents over 80% of the overall U.S. market capitalization as measured by the S&P Whole Market Index (TMI). Lots of the index’s constituents have a serious international presence, with revenues generated in a variety of international international locations. Due to this fact, regardless of its U.S. focus, the S&P 500 supplies perception into firms with a various income base throughout geographies and sectors.

Europe versus the U.S. – Variations in Publicity

The S&P Europe 350® is a European-centric counterpart to the S&P 500. The index focuses on the most important blue-chip firms domiciled in 16 European international locations, weighted by float-adjusted market capitalization primarily based on a variety of inclusion standards.

We use FactSet Geographic Income Publicity (GeoRev™) information, adjusted for sales-weighted publicity, to grasp the geographic unfold of constituent revenues for each the S&P 500 and the S&P Europe 350. For instance, firms within the S&P 500 generate round 70% of their income within the U.S., whereas firms throughout the S&P Europe 350 generate solely 24% of their income from the identical location.

Exhibit 1 compares the S&P 500 and the S&P Europe 350. It exhibits that the revenues of the S&P Europe 350 have a larger tilt away from the U.S. and towards Europe than the S&P 500. Due to this fact, a method combining the 2 indices might result in a extra various geographic income publicity.

In observe, industries will not be distributed evenly throughout geographies. Exhibit 2 exhibits that the S&P Europe 350 has vital weight in Industrials and Well being Care, reflecting the robust franchises in these sectors in international locations equivalent to Germany and France for Industrials and the U.Ok. for Well being Care. The S&P 500 has the next weight in Info Expertise and Communication Companies than the European index.

Exhibit 3 supplies the annualized complete return and the return/danger ratios for numerous hypothetical mixtures of the S&P 500 and the S&P Europe 350 over totally different intervals ending in September 2022. Exhibit 4 attracts the environment friendly frontier for various mixtures of S&P Europe 350 and S&P 500 allocations. The outcomes present that over longer time intervals, a hypothetical mixture of European and U.S. indices supplied the next return and extra favorable danger profile than the S&P Europe 350 funding alone, maybe reflecting the advantages of diversification.


The posts on this weblog are opinions, not recommendation. Please learn our Disclaimers.

Commodities Challenged by Slowing International Progress in November

Contributor Image

Fiona Boal

Head of Commodities and Actual Belongings

S&P Dow Jones Indices

Commodities, represented by the broad-based S&P GSCI, fell 1.7% in November on the again of weak point within the petroleum and grains complexes. International commodities markets had been significantly hit this month by worries over uncommon demonstrations in China towards COVID-19 curbs, with oil and grains falling to multi-month lows and safe-haven gold rising. After 11 months, the S&P GSCI was up 27.8% YTD, defying larger rates of interest and rising fears of a chronic international financial slowdown.

The S&P GSCI All Crude has misplaced over a 3rd of its worth since peaking in early March (and giving up all beneficial properties following the Russia-Ukraine battle); it is perhaps mentioned that oil costs are nodding in settlement with Treasury yields concerning an approaching financial slowdown. Within the petroleum advanced, a comparatively tight international provide image is competing with fears of an financial slowdown, a robust U.S. greenback, authorities intervention to handle skyrocketing retail vitality costs and indicators that vitality customers have taken steps to restrict consumption. A drop in monetary market participation within the main oil spinoff markets has contributed to larger ranges of volatility. Market members will probably be eagerly awaiting a call from EU member international locations concerning a value cap on Russian oil in early December, in addition to the Dec. 4, 2022, OPEC+ assembly to offer additional market route.

The S&P GSCI Grains declined 4.3% in November. Within the wheat market, low-cost provides from Russia and elsewhere within the Black Sea area have stored a lid on costs. In distinction, soybeans had been supported by robust onshore soymeal demand in China. Argentina’s resolution to provide a brief trade charge for soy exporters till the tip of the yr will seemingly encourage a surge of exports in December. The S&P GSCI Cotton rose 20.4% in November however remained greater than 50% off its Might excessive. As attire gross sales contract, the collapse in cotton costs has been attributed to weaker Chinese language demand for cotton yarn, in what could possibly be an indication that core inflation has began to wane. The S&P GSCI Livestock was unchanged over the month.

Industrial metals have to this point averted the malaise attributable to Chinese language unrest, and expectations of a world slowdown as an alternative targeted on steps introduced by China geared toward bailing out its struggling actual property sector. The S&P GSCI Industrial Metals rose 12.2% over the month, whereas nickel rallied 23.9%.

The S&P GSCI Gold gained 6.8% in November, ending a seven-month shedding streak. Indicators that the U.S. Fed might reduce the tempo of its rate of interest hikes, together with the continuing failures within the cryptocurrency ecosystem, helped help the so-called safe-haven asset.

To be taught extra in regards to the S&P GSCI and associated indices, try our Commodities Theme Web page.

The posts on this weblog are opinions, not recommendation. Please learn our Disclaimers.

Introducing the S&P Centered Indices

Contributor Image

Fei Wang

Senior Analyst, U.S. Fairness Indices

S&P Dow Jones Indices

The expansion of index-based passive investing will be attributed to its transparency, effectivity and low price, together with lively administration shortcomings. Extra not too long ago, buoyed by the expansion of direct indexing, there has additionally been elevated demand for indices that choose a subset of constituents from underlying benchmarks and are designed to fulfill specified goals.

S&P DJI not too long ago launched the S&P Centered Indices, that are designed with direct indexing use circumstances in thoughts.

S&P Centered Indices Methodology Overview

The S&P Centered Index Sequence at the moment contains three indices: S&P 500® Centered 50 Index, S&P 500 Centered 100 Index and S&P 500 Catholic Values Centered 100 Index. The primary two are primarily based on the S&P 500, and the third index is predicated on the S&P 500 Catholic Values Index. The goal firm counts are 50, 100 and 100, respectively, and the indices are reconstituted yearly.

Every S&P Centered Index is designed to have comparable International Trade Classification Normal (GICS®) trade group weights as its underlying index, which has additionally resulted in comparable sector weights traditionally.

Exhibit 1 compares the GICS sector and trade group weights of every S&P Centered Index towards its benchmark, as of Oct. 31, 2022. The outcomes had been just like their benchmarks; variations had been usually lower than 1%.

Again-Examined Efficiency Historical past

Maybe unsurprisingly, the similarity in sector and trade group weights between the S&P Centered Indices and their respective underlying indices contributed to comparable long-term efficiency, traditionally. For instance, solely 0.03% separated the annualized returns of the S&P 500 Centered 50 Index and S&P 500 since December 2009.

Nevertheless, larger deviations had been noticed over shorter horizons. As an example, the S&P 500 Centered 50 Index outperformed the S&P 500 by 2.36% YTD and by 2.99% over the previous 12 months.Exhibit 4 exhibits that the S&P Centered Indices’ development supplied comparable turnover figures as their benchmarks, traditionally.

Because of this, the S&P Centered Indices’ development could also be related for direct indexing managers trying to obtain comparable sector and trade group weights as their respective underlying indices, however with fewer names.


The posts on this weblog are opinions, not recommendation. Please learn our Disclaimers.

Related Articles


Please enter your comment!
Please enter your name here

Latest Articles