In This List

The Case for Information Technology Dividend Growers

Sector Primer Series: Utilities

TalkingPoints: How to Engage ESG in More Meaningful Ways

Conseguiram os gestores ativos da América Latina ganhar do mercado nestes tempos tumultuados?

Desempenho superior dos gestores ativos nos fundos brasileiros de títulos de dívida: Habilidade ou distorção dos preços?

The Case for Information Technology Dividend Growers

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Karina Tjin

Analyst, Strategy Indices

It was once thought that companies from the Information Technology sector do not pay dividends.  While this may have been the trend a long time ago, it certainly has not been for the last decade.  Over the past 10 years, within the Information Technology sector of the S&P 500®, 26 companies initiated dividend payments and 59 companies increased their dividends at various points throughout those years, for a total of 376 dividend increases in the sector.

During the same period, with an increasing number of Information Technology companies paying dividends, the contribution to S&P 500 total return by these companies rose from 9.07% in 2009 to 16.33% in 2019 (see Exhibit 1).

This change in the Information Technology sector creates a need to measure the performance of its dividend growers.  To do this, S&P Dow Jones Indices recently launched the S&P Technology Dividend Aristocrats® Index, which seeks to track the performance of Tech companies that have a history of consistently increasing dividends.  

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Sector Primer Series: Utilities

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Sherifa Issifu

Analyst, Index Investment Strategy

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Hamish Preston

Associate Director, U.S. Equity Indices

The Global Industry Classification Standard® (GICS®) assigns a company to a single business classification according to its principal business activity.  This assignment uses quantitative and qualitative factors, including revenues, earnings, and market perception.  The sector is the first level of the four-tiered, hierarchical industry classification system that includes 11 sectors, 24 industry groups, 69 industries, and 158 sub-industries.

Within the GICS framework, as outlined in Exhibit 1, Utilities companies include those that are primarily engaged in:

  • Supplying electric, gas and water utilities;
  • Operating as Independent Power Producers, Gas & Power Marketing & Trading Specialists, or Integrated Energy Merchants energy traders; and 
  • Generating and distributing electricity using renewable sources.

COMPOSITION

The S&P 500® Utilities comprises all companies in the S&P 500 that are assigned to the Utilities sector by GICS. Created in 1957, the S&P 500 was the first broad U.S. market-cap-weighted stock market index. Today, it is the basis of many listed and over-the-counter investment instruments.

The Utilities sector is the fourth smallest by capitalization of the 11 sectors in the S&P 500, representing 3.07% of the index as of June 30, 2020 (see Exhibit 2). This compares to 4.17% and 2.23% for the S&P MidCap 400® and S&P SmallCap 600®, respectively. Overall, the Utilities sector accounts for 2.95% of (and 71 securities within) the S&P Total Market Index; only the Energy and Materials sectors (2.63% and 2.69%, respectively) account for less, by index weight.

With a total float-adjusted market capitalization of USD 786.16 billion, the S&P 500 Utilities sector comprised 28 companies as of June 30, 2020. The two largest companies in the sector were NextEra Energy Inc (NEE) and Dominion Energy Inc (D), with float-adjusted market caps of USD 117.55 billion and USD 68.13 billion, respectively. There were no Utilities companies in the top 10 of the S&P 500—NextEra Energy Inc ranked as the 46th largest stock, representing 0.46% of the index. The mean market cap of S&P 500 Utilities stocks was USD 28.08 billion, the median market cap was USD 20.86 billion, and the lowest market cap was USD 7.95 billion.

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TalkingPoints: How to Engage ESG in More Meaningful Ways

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Mona Naqvi

Senior Director, Head of ESG Product Strategy, North America

The outperformance of funds that take environmental, social and governance (ESG) issues more seriously than their peers has reinforced why investors might want to integrate these factors into portfolios via the type of tools that S&P Dow Jones Indices has developed.

Encouraged by evidence of the materiality of ESG issues during the Covid-19 led volatility, there is greater appetite for sustainable themes in investor portfolios to align investments with one’s values and potentially generate higher risk-adjusted returns. At the same time, fuelled by greater transparency over how companies act and behave, and also spurred by trends in public opinion towards issues that matter to society as a whole, investors are seeking ways to leverage data and research to gain greater exposure to ESG factors.

Amid these trends, Mona Naqvi, Head of ESG Index Strategy for North America at S&P Dow Jones Indices (S&P DJI), spoke with AsianInvestor to explain the importance of financial materiality and other key ways to assess ESG, to help it be a core building block in portfolio construction.

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Conseguiram os gestores ativos da América Latina ganhar do mercado nestes tempos tumultuados?

A baixa volatilidade e a baixa dispersão fazem mais difícil aos gestores ativos agregar valor. Em outras palavras, espera-se que os ambientes de alta volatilidade e alta dispersão ajudem os gestores ativos a demostrar a sua habilidade. Neste sentido, março de 2020 ofereceu uma oportunidade aos gestores ativos1 no mundo, incluindo os dos mercados da América Latina. Os níveis elevados de dispersão e volatilidade se estenderam até maio de 2020.

Apesar das circunstâncias, a maioria dos gestores ativos de renda variável no Brasil e no Chile perdeu para os seus benchmarks respectivos em 2020. Embora o bom desempenho dos fundos large cap do Brasil mostrado no Scorecard SPIVA da América Latina - Final do ano 2019 tenha continuado nos períodos de um e três anos encerrados em 31 de maio de 2020, no longo prazo não foi bem assim.

Exhibit 1. Did Latin American Active Managers Outperform in This Tumultuous Time?
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Desempenho superior dos gestores ativos nos fundos brasileiros de títulos de dívida: Habilidade ou distorção dos preços?

Os gestores ativos registraram resultados impressionantes na categoria de fundos de títulos de dívida corporativa do Brasil, em que 93,6% deles ganharam do seu benchmark em março de 2020 e 88,2% no primeiro trimestre de 2020. No entanto, se produziram estes resultados por causa de uma habilidade real?

Na verdade, este desempenho superior pode estar relacionado com uma distorção do mercado. Por um lado, os títulos de dívida corporativa do Brasil registraram saídas de capital recorde em março de 2020, o que obrigou os gestores a vender e, portanto, aumentou os spreads e distorceu os preços. Por outro lado, as caraterísticas do benchmark abrem uma janela de distorção: o Anbima Debentures Index representa uma carteira ampla de debêntures que não é necessariamente replicável. O segmento do mercado é particularmente ilíquido e em cenários de tensão como o observado em 2020, o índice pode não refletir o mercado real.

Exhibit 1. Active Managers’ Outperformance in Brazilian Bond Funds.
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