By: CFA Institute Contributor

These are articles written by professionals for investment professionals. They are contributions from external subject matter experts who do not work for CFA Institute, but may be a CFA charterholder as well as a member of a CFA Society. All are experts in their field and strive to deliver useful insights that help investment professionals make better decisions.

All 123 Articles

‘Quality losses’ matter more to investors than ‘quality gains’

September 21, 2021

People dislike losses more than they like gains. Known as loss aversion, this phenomenon, or behavioural bias, serves as a cornerstone of prospect theory, developed by Daniel Kahneman and Amos Tversky more than 40 years ago. A forthcoming paper, which I co-authored with Didem Kurt, Koen Pauwels and Shuba Srinivasan, applies this theory to product [...]
Socially responsible investing and performance: a long-term winner

September 14, 2021

Companies with stronger ESG ratings outperform, particularly in times of crisis, as we witnessed during 2020, says Coline Pavot, La Financière de l’Echiquier (LFDE)’s head of responsible investment research. Companies that rank well according to environmental, social and governance (ESG) criteria tend to outperform the average and have greater resistance to crises. This was confirmed [...]
Revisiting Beta: How well has Beta predicted returns?

September 7, 2021

After the capital asset pricing model (CAPM) was developed in the 1960s and 1970s, financial researchers started to test how well this theoretical model actually worked in the real world. Amid expanding computing power and greater data access, the 1980s became a critical era for gauging CAPM’s validity as analysts explored beta’s effectiveness in anticipating [...]
Benchmarking has become circular

August 31, 2021

Time and again throughout my career I have ranted about the nonsense of benchmarking in all its forms. By now I have given up on the hope that business and investing will ever leave the practice behind, so I don’t expect this post to change anything except to make me feel better. I spoke recently [...]
ESG: full speed ahead, sat-nav still required

August 24, 2021

Sustainable investing based on environmental, social and governance (ESG) factors has become central to how we invest. Investors are demanding more from their asset managers: they want to invest based on their values and they are demanding more accountability from companies about addressing changing societal issues. Indeed, the Index Industry Association (IIA)’s most current latest [...]
Herd and illusory superiority bias: Why even seasoned investors succumb

August 17, 2021

The herd bias phenomenon or the ‘bandwagon effect’ will be familiar to most long-time investors. It leads people to make investment decisions based on the belief that ‘everyone’s doing it’. This type of behaviour is part of human nature, though, in the context of markets, it is usually associated with novice retail investors who aren’t [...]
Strategic asset allocation or how I learned to stop worrying and love dispersion

August 10, 2021

For decades, strategic asset allocation has been considered the driving force behind investment portfolio returns. But the old adage that allocation determines 90 per cent of performance is rapidly becoming outdated. During 2020 and 2021, we have seen how the world of investing is shifting from one in which declining interest rates drive beta performance [...]
`Your network is your net worth´: seven tips to propel your career

July 27, 2021

My thought leadership speaking tours to the Middle East and Europe were postponed. To convince the organizers to host their events online, I went on a shopping spree and bought all kinds of audio and video equipment just before the first lockdown in Singapore. It wasn’t just me. Everyone, from students to senior professionals, needed [...]
‘What I Know Is…’: black professionals share their experiences

July 20, 2021

One of the main reasons for the under-representation of black professionals in investment management is the lack of knowledge and information about joining the investment profession and the opportunities that it can deliver. For the financial sector which is increasingly focused on sustainability and where corporates are increasingly rewarded for good ESG policies, ensuring that [...]
MiCA: A ‘beta version’ of crypto-assets regulation in the EU

June 8, 2021

Alexander Prognimak, CFA from the CFA UK Future of Money Working Group, looks at European Union plans for crypto-assets. Gone are the days when London’s famous red buses would be carrying adverts promoting the dream of a shiny post-Brexit future for the NHS. As one ad (that has attracted the advertising regulator’s attention) read: ‘If [...]

BP toasts to ‘exceptional’ oil trading after Iran volatility

Tottenham Hotspur hospitality: Trendsetting innovation in action

The mysterious media moguls behind London’s pink slime propaganda machine

By: CFA Institute Contributor

All 123 Articles

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