Defining the Decade: Ten Years of Growth

Cboe Blog
January 10, 2020

While the managing editor of the Farmers' Almanac states that the new decade actually starts in 2021, we were feeling nostalgic as we say goodbye to our teenage years and head into 2020. Sure, we've got one more year to go, but we wanted to share some interesting trends we found over the past 10 years.

Marked by unprecedented growth, the 2010s experienced the longest U.S. bull market in history and was the first 10-year span in at least 170 years that did not experience a recession in the U.S. As we ring in a new year, here are some of the greatest examples of growth in the 2010s.

How Cboe’s Indices Stacked Up

Punctuations of Volatility

Despite long-term market calm throughout the decade, there were several notable moments of heightened volatility over the past ten years.

On August 11, 2011, the Cboe Volatility Index (VIX Index) reached its highest closing daily value of the decade with a reading of 48.00. Just six days earlier, on August 5, 2011, Standard & Poor’s announced its first-ever downgrade to U.S. sovereign debt, stating, “the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges.”

Several years later, on February 8, 2018, the VIX of VIX Index reached 180. 61, its highest closing daily value of the decade, amid a market sell-off and investor anxiety over rising interest rates and the health of the U.S. economy.

On August 13, 2018, the Cboe SKEW index reached 159.03 to mark its highest closing daily value of the decade. Increases in SKEW correspond to an overall steepening of the curve of implied volatilities, which may have been caused by ongoing trade tensions.

Benchmark Indices Showed Higher Returns

The vast majority of benchmark indices continued to show higher returns throughout the decade, with the Cboe VIX Premium Strategy Index (VPD) claiming higher returns than stock and commodity indices, including the S&P 500 and Russell 2000.

Interest Rate Indices Become Interesting

Interest rate indices picked up steam, too, and Cboe responded to clients’ growing need for broader exposure to the U.S. corporate bond market by launching corporate bond index futures in fall of 2018. The futures allow users to gain broad exposure to the $8.8 trillion U.S. corporate bond market, hedge corporate bond credit risk, allocate to the corporate bond market quickly and efficiently, and/or implement fixed income trading strategies.

Sector Performance

Mid-decade, we saw the distribution of sector performance widen across the 11 S&P Select Sector Indices, reflecting a change in societal values and needs. To help clients express their views on specific sectors, Cboe listed options on the S&P Select Sector Indices. By the end of 2019, the consumer discretionary sector led the pack, followed closely by the technology sector and the healthcare sector. As the economy continued to grow stronger, it’s no surprise sector investors gained confidence in consumer discretionary spending. Technology became much more prevalent in day-to-day activities, in addition to playing an integral part in the booming gig economy. The passage of the Affordable Care Act in 2010 changed healthcare in the U.S. while the number of available new treatments and medical breakthroughs skyrocketed.

Last But Not Least: The S&P 500 Index

And, to top it all off, take a look at how SPX has climbed since the start of the decade.