Academic round-up: Is it really all about AI?

Mutual fund pricing, AI returns, the carry trade, and more

This edition of the Savvy Investor academic round-up offers the latest research from some of the top institutions around the globe today. With topics covering the widening gap between AI investment and AI value, the architecture of mutual fund pricing, the hidden structure of carry trade profitability, and more, investors will glean valuable insights to consider for their investment programs.

The Hidden Cost of Stock Market Concentration (Becker Friedman Institute)

The U.S. stock market has become highly concentrated. The risks of this development are not always clear, however.

After the AI Crash (Vanderbilt University)

The AI economy has a math problem: Companies are investing trillions of dollars based on tens of billions of dollars in revenues.

The Architecture of Mutual Fund Pricing (Florida State University)

American households hold $40 trillion in mutual funds, with $12 trillion in actively managed funds charging fees statistically indistinguishable from those of 1965.

The AI Intelligence Deficit (Straven & Co Inc.)

Drawing on market data indicating that 95% of enterprise AI pilots fail to deliver measurable returns, the paper presents two original analytical frameworks.

Speculation or Fundamentals in European Natural Gas (Levy Economics Institute)

This paper investigates the role of speculation in European natural gas price dynamics over the period 2020–2024.

The Hidden Structure of Carry Trade Profitability (Hong Kong University)

The authors argue that one reason the carry trade puzzle has proved so resistant is that the standard implementation of carry trades.

Dinner Table Alphas

Mutual fund managers with spouses that work at the executive and C-suite levels obtain monthly gross returns of up to 0.32% above asset managers with non-executive spouses.

Modeling of Large Unbalanced Option Implied Volatility Surfaces (Amundi)

For compliance reasons, this paper is NOT accessible in the United States

Because of the explosive growth in option trading volume, the study of option markets and option prices in particular is the subject of a large and growing body of research.