Editor’s Letter

doi:10.3905/jii.2012.3.2.002

We open our Fall issue with Haslem’s discussion of various types of agency conflicts that negatively impact mutual fund shareholder interests. This is followed by Geman, Thukral, and Wright’s article, which examines the use of ETNs in the precious metal space. Indexes aggregate the price and return performance of stocks to provide summary measures and the local currency represents the underlying index basis. Jalbert develops new stock indexes that control for the effects of dollar value fluctuations. We continue with Johnson’s examination of the use of ETFs for diversification, looking at issues like saturation and cost of ownership premium.

A sovereign default risk model is presented by Wang to investigate the fundamental shift in the market perception of risk factors in fixed income investment. Krein and Fernandez examine the rapid evolution of volatility risk control indexes intended to gauge portfolio risk by targeting desired risk tolerances. This is followed by Morillo, Da Conceicao, Edrosolan, and Stewart’s comparison of beta provided by ETFs and index futures. We conclude the issue with a discussion of the determinants of convexity in mutual funds by Fu, Navone, Pagani, and Pantos.

We welcome your submissions. Please encourage those you know who have good papers or have made good presentations on indexing, ETFs, mutual funds, or related subjects to submit them to us. We value your comments and suggestions, so please email us at journals{at}investmentresearch.org.

Brian R. Bruce

Editor-in-Chief

Notice to readers: We received the following note from Professor Gerasimos Rompotis. We look forward to the updated results which will be considered for publication in a future issue of the Journal of Index Investing.

“The Spring 2012 issue of the Journal of Index Investing contained an article that I authored which included an assessment of whether leveraged and inverse ETFs have historically met their stated daily investment objective. The analysis was based on closing market prices rather than net asset values (NAVs). I will be updating my analysis based upon NAV values.”

—Gerasimos Rompotis

Footnotes

Publisher’s Note:
Institutional Investor, the Publisher of The Journal of Index Investing, wants to extend a special thanks to the sponsors for supporting the launch of The Journal of Index Investing. Please note that no sponsor has influence on the editorial content found in The Journal of Index Investing. Representatives fromany firmare encouraged to submit an article to our independent editor, Brian R. Bruce, for review and prospective acceptance into the publication. All editorial submissions, acceptances, and revisions are the sole decision of Mr. Bruce. The editorial submission guidelines are found on the last page of the publication. I hope that you enjoy this and future issues of The Journal of Index Investing. Thank you.
Allison Adams
Group Publisher, Institutional Investor Journals, aadams{at}iijournals.com