Saturday, March 30, 2013

Diversity Index Portfolio Outperforms S and P 500

Creative Investment Research, Inc. announced today that it's Diversity Index Portfolio returned 35.13% from April 19, 2011 to March 30, 2013. The Diversity Index is an investment portfolio containing stocks of the largest companies in the U.S. These companies have been selected because they have outstanding investment characteristics and are top performers with respect to four key measures of inclusion and diversity: Human capital, CEO commitment, corporate communications, and supplier diversity.

By comparison, the S and P 500, or the Standard and Poor's 500, returned 18.14% over the same time period. According to Wikipedia, "The S and P 500 is a stock market index based on the market capitalizations of 500 leading companies publicly traded in the U.S. stock market, as determined by Standard and Poor's. It is one of the most commonly followed equity indices and many consider it the best representation of the market as well as a bellwether for the U.S. economy."

The chart at left shows this performance graphically.

NOTE: "All references to performance in the text, data and spreadsheet refer to an analysis of market indexes or hypothetical portfolios using historical data from April 19, 2011 to March 30, 2013, and not for any actual accounts, either past or present. Static performance: An implicit assumption about the data is that the diversity related performance of the companies would have remained static from 2011 to 2013. In reality, this may or may not have been the case. The diversity related performance of a company will improve and deteriorate relative to peers over time. This type of bias may or may not be significant for the results of the portfolio, but it would definitely impact the selection of companies to be included in the portfolio. The analysis in no way represents the results of actual trading using client assets, but rather involves hypothetical results obtained by means of the retroactive application of a theoretical study and analysis designed with the benefit of hindsight. Expenses: No consideration was given to expenses, which would normally be included in a real-world scenario, including management fees, commissions, markups or markdowns, other trading costs, taxes, and other fees and costs of all types." SOURCE: Profitable socially responsible investing? An Institutional investor’s guide. By Mark J. Lane, Esq.,, Institutional Investor Books, 2006.

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