A chat with Michael Mell, Senior Director, Custom Indices at S&P Dow Jones Industries to discuss the explosion in passive investing.
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Recently Tematica Investing’s Chief Investment Officer, Chris Versace, had the opportunity to chat with Michael Mell, Senior Director, Custom Indices at S&P Dow Jones Industries to discuss the explosion in passive investing that is occurring given consumers adopting exchange traded funds (ETFs) in their portfolios. Underneath the hood of a passive ETF is an index that it tracks that defines its investment strategy and style. The explosion in passive investing and ETFs have given rise to a plethora of custom indices, hence Chris’s conversation with Michael about the ins and out of passive investing and indexing. Along the way, he explains the role of S&P Dow Jones Custom Indices, including how he and Chris worked together to bring the NJCU New Jersey 50 Index (^NJCUPR) to life.
Resources for this podcast:
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This week, Tematica’s investing mixologists Chris Versace and Lenore Hawkins do a deep dive on our Aging of the Population investing theme. The simple fact is both the U.S. and global population are skewing older and this dynamic has a number of ramifications for companies, some of which will ride that tailwind and cater to the emerging demand and pain points of an older population while others see their business hit a profound headwind. Lenore and Chris talk about these as well as discuss the larger headwinds this investment theme for economic growth to be had as the aging population continues to grow over the ensuing decades.
Along the way, our mixologists talk about which companies are poised to prosper from the intersection of our Aging of the Population theme with our Connected Society, Cash-strapped Consumer and Disruptive Technology investing themes. And they even share the term “CamperForce,” something that has been of keen use to Amazon and is likely to be for Wal-Mart and others as they ramp their e-commerce businesses.
Companies mentioned on this podcast
- Alphabet (GOOGL)
- Amazon (AMZN)
- Apple (AAPL)
- Charles Schwab (SCHW)
- Facebook (FB)
- Fitbit (FIT)
- LPL Financial (LPLA)
- Johnson & Johnson (JNJ)
- United Parcel Service (UPS)
- Wal-Mart (WMT)
Resources for this podcast:
- Chris Versace – @_ChrisVersace
- Lenore Hawkins – @EllesEconomy
- Tematica Research – https://www.tematicaresearch.com
- Themes Report: https://www.tematicaresearch.com/whatisthematicinvesting
- Cocktail Investing: Distilling Everyday Noise into Clear Investment Signals for Better Returns
Books we’re currently reading:
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In this special excerpt from Episode 33 of the Cocktail Investing Podcast, Lenore Hawkins discusses that while JPMorgan Chase CEO Jamie Dimon is likening Bitcoin to the Dutch tulip bulbs bubble in the 1600’s, the reality is we are just in the early innings of cryptocurrencies. The question is, can Bitcoin maintain its pole position, or is its fate similar to that of many of the early internet pioneers? Tune into this quick primer on cryptocurrencies (just 6:30 in length) and its impact on our Cashless Consumption investment theme.
It was quite a week that started off with winter storm Stella, a Fed interest rate increase and finished up with St. Patrick’s Day. Your resident mixologists, Chris Versace and Lenore Hawkins, were busy sharing their thoughts on all of that as well as the February Retail Sales report this week and break it all down for you on this episode of Cocktail Investing. As usual, the High Priestess of Global Macro that is Lenore Hawkins has a number of data points to share that will raise eyebrows over what the mainstream financial media is calling an “improving economy.” Keep in mind that even if the Fed’s GDP forecast rings true through 2019, it means we will have experienced 14 consecutive years with annual GDP not breaking past 3.0 percent. As Lenore points out, that’s never happened before, not even during the Great Depression.
Sounds like some big headwinds to growth and yet the “data dependent” Fed raised rates even though the Atlanta Fed slashed its GDPNow forecast for 1Q 2017 to 0.9 percent last week vs. more than 3.0 percent at the start of January and 4Q 2016’s GDP of 1.9 percent. Was the Fed’s March interest rate increase because of inflation or was it because of something else?
Chris and Lenore share their thoughts on all of that as well as several Thematic Signals that we collect each and every day that serve to confirm our 17 investment themes. During this episode, they’ll share some of the latest that pertain to our Connected Society, Aging the Population, Foods with Integrity and Guilty Pleasure investing themes. On St. Patricks day on a show titled Cocktail Investing, it’s rather fitting to talk about how Amazon is putting liquor stores in its crosshairs.
More Thematic Signals can be found each and every week here. If you’d like to listen to past episodes of the Cocktail Investing Podcast, you can find them here.
Companies/Stocks Mentioned on the Podcast
- Amazon (AMZN)
- Consumer Discretionary SPDR ETF (XLY)
- International Flavors & Fragrances (IFF)
- JPMorgan Chase (JPM)
- McCormick & Co. (MKC)
- Netflix (NFLX)
- Russell 2000 (RUT)
- S&P 500 (SPX)