By Fei Mei Chan, Director, Index Funding Technique, S&P Dow Jones Indices
By Fei Mei Chan, Director, Index Funding Technique, S&P Dow Jones Indices
To this point, 2020 has introduced us a world pandemic, a coordinated international financial shutdown, and, within the U.S., a notably contentious election. So it’s no shock that volatility has been, and stays, elevated. Regardless of all this, equities have fared moderately (some would say surprisingly) nicely, with the S&P 500® climbing 13% by way of Nov. 19 because the finish of 2019.
The elevated volatility will be seen throughout all sectors of the S&P 500 relative to the start of the 12 months, regardless of having declined a bit prior to now three months. The best volatility sectors proceed to be Power and Financials.
The most recent rebalance for the S&P 500 Low Volatility Index (efficient after market shut Nov. 20, 2020) wrought minimal adjustments. Solely eight names, accounting for about 7% of the index’s weight, cycled out of the index. The Power, Financials, and Utilities sectors, historically low volatility stalwarts, continued to carry solely a small fraction of the portfolio. Client Staples and Well being Care collectively accounted for simply over 50% of the rebalanced portfolio’s weight, as our methodology targets the 100 least risky shares within the benchmark S&P 500.
Initially revealed by Indexology, 11/20/20
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