Featured Company: CFA Institute - Thought Provoking Content
CFA Institute is the global association of investment professionals that sets the standard for professional excellence and credentials. The organization is a champion for ethical behavior in investment markets and a respected source of knowledge in the global financial community. The end goal: to create an environment where investors’ interests come first.
CFA Institute publishes Financial Analysts Journal, CFA Institute Magazine, CFA Digest, and other valuable sources of high-quality, thought-provoking content. Here is some of their best content from the last six months:
Financial Market History: Reflections on the Past for Investors Today
This compendium of papers provides a detailed and fascinating look at the history of financial markets. Each section discusses a different facet of markets including risk and return, bubbles and crises, financial innovation, and more.
Factor Investing and Asset Allocation
Factor investing is as old as the hills, but it has only recently become a widespread practice. This paper explores what is behind this sudden change, what analysts at firms that engage in factor investing do, and what results investors might expect.
Future State of the Investment Profession
In this 25-page report, the CFA Institute suggests that while finance is a means to an end, the investment industry is struggling to recognize the end purposes. The report discusses different aspects of the profession and what the future might hold.
Fundamentals of Efficient Factor Investing
In this paper, the authors examine traditional portfolio theory and adapt it to factor-based investing and simulate the most favorable mix of factor and security portfolios.
Inefficiencies in the Pricing of Exchange-Traded Funds
This 31-page paper examines the topic of ETF pricing inefficiencies. Antti Petajisto introduces a novel approach that uses the cross section of prices on a group of similar ETFs to control for stale pricing of the underlying assets.
Technical Analysis: Modern Perspectives
In this paper, the CFA Institute Research Foundation explores the modern applications of technical analysis. The authors expand on the evolution, practice and criticisms of technical analysis.
Brexit - What It Means for Investment Management
Brexit has important implications for UK and EU investment management firms and their clients. This guide for investment management professionals delivers insights on the legal and regulatory implications of Brexit and analyzes the possible outcomes.
Financial Risk Tolerance: A Psychometric Review
This content from CFA Research Foundation reviews the ways financial risk-tolerance tests can and should be evaluated. Initially the report clarifies terms related to risk taking and concludes with examples for practice.
The Value of Premium Wealth Management
Investor needs are changing rapidly. To assess this change, CFA Institute conducted extensive research with HNWIs and wealth managers. This thought leadership paper was produced in collaboration with Scorpio Partnership.
Active Share and the Three Pillars of Active Management: Skill, Conviction, and Opportunity
This article, by Martijn Cremers, relates Active Share to the fund manager's stock-picking skill, opportunity, and conviction. The author proposes a new formula for Active Share and shows why and how to adjust the expense ratio.
The Long-Run Drivers of Stock Returns: Total Payouts and the Real Economy
Philip Straehl and Roger Ibbotson provide evidence from the period 1871 to 2014 that total payouts (dividends plus buybacks) are the main catalysts of long-run stock market returns.
Are Cash Flows Better Stock Return Predictors Than Profits?
This 27-page paper examines whether cash flows, instead of profits, are a better predictor of stock returns.
Funding Ratio Peaks and Stalls
The authors examine how funding ratios evolve over time, using the concept of “fulfillment return” to clarify the limitations of the single-point funding ratio measure.
Portfolio Structuring and The Value of Forecasting
This report consists of five chapters, each written by a renowned specialist in the field of factor investing or investment forecasting. Authors include Andrew Ang, Mark Carhart, CFA, Craig Bodenstab, CFA, Phil Tetlock and David Rapach.