The few surprises, according to an analysis by Sandy Rattray, head of index research at Goldman , Sachs included a smaller-than-expected reduction in the weight of Japanese stocks, while the 12 euro nations took a substantial hit, as expected.
This isn't a crazy guy in London making a prop bet," said Peter Tchir, a former head of index trading at RBS who now oversees the hedge fund TF Market Advisors.
"They've dropped the smaller weights out of the index and replaced them with what they deem to be better candidates representing the way the economy is moving," said Trista Rose, the global head of index strategy at UBS. "I wouldn't say that it would have a noticeable impact on trading volume".
The index had a 66% return in 2013 — its best performance in at least 10 years, says David Krein, managing director and head of index research at Nasdaq, adding that in 2012, the biotech index rose 32%.
The significant outperformance of the fossil free index reflected the troubled year suffered by energy companies, said Tom Kuh, head of ESG indexes for MSCI: "The challenge for investors is to figure out whether what is going on with energy is cyclical or structural".
Peter G. Grennan, head of stock index futures trading for Shearson Lehman Brothers, argued that the small difference between the advances and declines clearly showed that the buying was selective.
Trustworthy information on share ownership is often hard to find.Levels of disclosure vary, says Giacomo Fachinotti, head of the index committee at MSCI.
Gus Sauter, head of equity index funds for the Vanguard Group, said that if things went well -- if the transition was spread out and did not distort prices -- the costs could be one-half a percentage point from returns.
"There's so much conflicting news and rumors about what's happening in the Middle East, it's confusing to figure out what's going on," said Peter G. Grennan, head of stock index futures trading at Shearson Lehman Brothers.
"The weak numbers for durable goods and car sales helped bonds and, in turn, helped stocks," said Peter G. Grennan, head of stock index futures trading for Shearson Lehman Hutton Inc. "What the numbers mean," he said, "is that interest rates will stay at low levels". Low rates, in turn, encourage investors to buy stock rather than shift money into bonds in search of heftier returns.
