Since 1977, Roger Ibbotson has conducted groundbreaking research on asset allocation and investment strategies. His daring prediction — large-cap stock returns over 11% annually would lead to the Dow breaking 10,000 — made him one of the most famous names in finance.

His four-decade teaching career with the University of Chicago and Yale University has included 10 prestigious Graham and Dodd Awards and placed him among a select group of academics who have helped change the way investors think.

Professor Ibbotson and his team at Zebra Capital Management now bring that wealth of experience to the design of the new NYSE® Zebra Edge™ Index. This dynamic index capitalizes on the core insight of his career: stocks historically have provided higher returns than bonds.

Early in his career, Professor Roger Ibbotson realized that for different asset classes — like stocks, bonds and cash — more risk generally offers more return. More recently he specifically looked within the stock market, and the relationship wasn’t there — riskier stocks did not consistently offer higher returns. To find out why, Ibbotson turned to behavioral finance.

Ibbotson found his answer in what he calls “popularity.” The most popular stocks based on trading frequency had a tendency, in general, to provide below average returns. Ibbotson believed that stocks that were less popular had a better opportunity for returns: “The people who were popular in high school are not going to become more popular in later life. That is good news for those of us who were not. Things that have something wrong with them are easier to improve.”

The NYSE® Zebra Edge™ Index is a rules-based, risk-controlled index which leverages Ibbotson’s behavioral research. Less popular and less volatile stocks provide the potential for consistent long-term returns.