Active Index Investing: Maximizing Portfolio Performance and by Steven A. Schoenfeld

By Steven A. Schoenfeld

For over 3 many years, indexing has develop into more and more permitted by way of either institutional and person investors.  Index benchmarks and funding items that music them were a driver within the transformation of funding technique from artwork to technology. but traders’ realizing of the sophistication of this burgeoning box has lagged the growing to be use of index products.

Active Index Investing is the definitive consultant to how indexes are developed, how index-based portfolios are controlled, and the way the world’s such a lot subtle traders use index-based innovations to reinforce functionality, lessen expenses and reduce the dangers of investing.

Active Index Investing offers a entire review of (1) the funding theories which are the basis of index established making an investment, (2) top practices in benchmark building, (3) the starting to be global of index-based funding automobiles, (4) state of the art index portfolio administration techniq ues and (5) the myriad methods traders can and do seize some great benefits of indexing.

Active Index Investing has a different layout that captures the perspectives and views of over forty of the funding industry’s prime specialists and practitioners, whereas retaining a holistic view of this complicated subject material. as well as the Appendix and thesaurus in the ebook, it good points an E-ppendix, on hand at www.IndexUniverse.com

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Topics include index construction methodology, client needs and motivations, the underlying market microstructure, trading and transaction costs, and macroeconomic and other market-moving forces. Part Five, the final section, is an exploration of why and how sophisticated investors use index-based products to minimize costs and risks, and maximize portfolio performance. In these seven chapters and six sidebars, readers see the perspective of large public institutional investors, financial advisors, and authors writing from the individual investor’s viewpoint.

This total portfolio perspective can use investor cash flows to rebalance between and among asset classes—domestic and international equities, fixed income, real estate securities, and others. Using new funding to rebalance with index products can be a highly efficient way to achieve the long-term benefits of multi-asset class index or index and active strategies. This approach is discussed in Chapter 28 and in more detail in Chapter 30. Working alone, or with their asset managers or financial advisor, investors have virtually limitless opportunities for creative solutions, with transparent, cost-effective, and efficient investment vehicles.

In 1896, Dow Jones created the industrial average (with 12 stocks) and separated the railroad stocks into a separate average, which was renamed the Transportation Index. Daily publication of the Dow Jones Industrial Average (DJIA) began in the Wall Street Journal on May 26, 1896. The DJIA expanded to 20 stocks in 1916, and to 30 in 1928. 1). S. equities. In 1913, Alfred Cowles conducted the meticulous research that would later form the basis of Standard & Poor’s stock indexes. Not until the 1960s, however, would the technology be available to compute market capitalization-weighted indexes like the S&P 500 in real time.

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