Editor's Note

January 01, 2007

Celebrating Innovation

MattAs I sit down to write this note, Jim Wiandt and I are busy putting together the finishing touches on the voting ballots for the 2006 IMN/IndexUniverse.com William F. Sharpe Indexing Achievement Awards. The Sharpe awards honor the most innovative advances in the indexing industry over the past year.

This year, we are awarding Lifetime Achievement Awards to Dr. Burton Malkiel, author of the seminal indexing book, A Random Walk Down Wall Street, and Robert Ryan, creator of the Lehman Aggregate Bond Index, and, ipso facto, the father of bond indexing. We also have four voted awards:

  • Most Innovative Benchmark Index
  • Most Innovative Index Fund/ETF
  • Most Innovative Index Derivative (Future or Option)
  • Best Index-Related Research Paper

I will be presenting the awards at the Superbowl of Indexing Conference in Phoenix on December 4, and it will be quite an honor. By the time this issue hits the press, you’ll be able to see who won all the “most innovative” Sharpe awards on www.indexuniverse.com.

One of the most powerful innovations to sweep the index industry over the past year has been the great opening up of the alternative assets space. Commodities, real estate, emerging markets, hedge-fund-like strategies … indexes, index funds and ETFs are now offering investors low-cost access to these important asset classes for the first time ever. An investor today has a better chance of building a well-diversified portfolio than at any time in history, and the index industry is the reason why.

It’s fitting, therefore, that we kick off the 2007 Journal of Indexes season with an article on alternative assets. We’re pleased to have Lee Kranefuss of Barclays Global Investors leading things off with a thorough analysis of the diversifying benefits of adding commodities, real estate and emerging markets exposure to your portfolio.

Of course, once you decide to add—say—commodities exposure, you have to know how to do it. Toward that end, David Krein’s comprehensive survey of various commodities investing vehicles is simply invaluable. Rounding out our alternative assets coverage, Rich White brings an advisor’s perspective to the table, with a look at how four different commodity ETFs might fit in an investor’s portfolio.

To add some diversification to our issue, we also have a strong piece by Lisa Dallmer of the NYSE answering one of those questions you’ve always wondered about, but were afraid to ask: What, exactly, is Regulation NMS? Meanwhile, Neal Wolkoff of the AMEX chimes in with an interesting look at the hot topic of intellectual property; John Bogle reminds investors that they should NOT trust the numbers; and Gary Gastineau and Tina Lazarian weight in with a fun and intriguing article on the etymology of the word “index.” Jim Wiandt, who ceded this coveted spot to me for this issue, closes the Journal with a jeremiad on what’s plaguing the 401(k) industry. (I can’t wait to see the “Letters to the Editor” on that one.)

Best wishes for the New Year, and keep those index innovations coming,


Matt Hougan,
Senior Editor


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