Tony Davidow, the newly appointed managing director and portfolio strategist at Rydex|SGI, likes to remind the market that an equal-weight strategy has a better performance track record that the cap-weighted strategy, for investing in exchange-traded funds.
Davidow will continue to press that point, and others, in his role at Rydex, which hired him as part of its growing commitment to the ETF market.
In a cap-weighted ETF strategy, companies are mega-multinational companies like ExxonMobile [XOM] with larger market capitalizations can have a disproportionately high impact on the performance of an index than smaller companies, like Office Depot [ODP], Davidow said in a telephone interview on Wednesday. The ratio can be as high as 300 times, he said.
The equal-weight strategy is much more favorable from a risk-return perspective, inherently, and is a more logical way of diversifying risk, Davidow said. “We don’t believe in making concentrated bets,” he said.
Previously, Davidow was head of distribution at IndexIQ, which develops index-based alternative investment services. He was also a managing director at Morgan Stanley, where he ran the sales and training operations for the consulting group. He built Morgan Stanley’s institutional consulting business.
Additonally, Davidow has worked at Graystone Wealth Management, the American Stock Exchange and a family office.
Kevin M. Keefe has joined the New York City-based Advisor Group as senior vice president of product development and investment research. Keefe was a senior vice president at LPL, where he worked in investment research, financial planning, sponsor relations and wealth management.
Clearbrook Global Advisors has hired Timothy C. Ng and Mark N. Hong, CFA, for its investment arm, Clearbrook Investment Consulting, LLC. Ng will be managing director and head of research with responsibility for, and oversight of, all aspects of the company’s process, the company said. Mr. Ng will be instrumental in building the Clearbrook Research team, and defining its best practices. Hong will be a director, in charge of its research process, focusing on its allocation of alternative investments. Ng is the former President and Chief Investment Officer of Structured Investment Group, LLC, (SIG), with offices located in New York City, and Hong is a former co-founder and Principal of SIG.