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1. Best investment returns 2017 low index funds drivers#
2. Best investment returns 2017 low index funds professional#

Implementable through exchange-traded funds or index futures, a portfolio based on country indexes with favorable factor exposures significantly outperforms, both economically and statistically, the world market capitalization portfolio, according to Timotheos Angelidis and Nikolaos Tessaromatis

Global Equity Country Allocation: An Application of Factor Investing

Best investment returns 2017 low index funds drivers#

Ibbotson provide theoretical and empirical evidence over 1871–2014 that total payouts (dividends plus buybacks) are the key drivers of long-run stock market returns.

The Long-Run Drivers of Stock Returns: Total Payouts and the Real Economy Inefficiencies in the Pricing of Exchange-Traded FundsĪntti Petajisto demonstrates that the prices of exchange-traded funds (ETFs) can deviate significantly from their net asset values (NAVs), in spite of the arbitrage mechanism that allows authorized participants to create and redeem shares for the underlying portfolios. Rather, it is balancing that ever-competing pair in a way that places the best interests of consumers and clients above our own corporate and personal interests.Īre Cash Flows Better Stock Return Predictors Than Profits?Īlthough various income statement–based measures predict the cross-section of stock returns, direct method cash flow measures have even stronger predictive power, according to Stephen Foerster, CFA, John Tsagarelis, CFA, and Grant Wang, CFA.

Best investment returns 2017 low index funds professional#

The issue faced by CFA charterholders and other financial industry participants is not choosing between professional values and business values, John C. Top CFA Institute Financial Analysts Journal ® Articles of 2017īalancing Professional Values and Business Values But in addition to its intuitive appeal, behavioral finance may have important practical uses in areas as varied as analyst herding, manager selection, household stock market participation, and investor risk tolerance.įinally, judging by the renewed interest in understanding what constitutes a genuine value-investing technique rather than a “formulaic impostor,” could there be an end in sight for the prolonged bear market afflicting value stocks? Traditional investment models, predictive approaches, and drivers of investment returns are now under increased scrutiny, especially since equity valuations took flight thanks in part to a few tech stocks.Įlsewhere on the popularity list, readers of CFA Institute publications display an admirable thirst for more exact and rigorous measuring techniques in investment performance, bond yield spreads, equities research, and instrument pricing.Ĭonfusion among practitioners about the real-world usefulness of behavioral finance models turns out to have an empirical basis. (Check out my trilogy of articles curating factor investing resources.) But the lineup displays a healthy skepticism about quantitative approaches, including data mining, value-at-risk (VAR), and exchange-traded fund (ETF) mispricing. Of the newer investment techniques, global factor investing - better known as smart beta - makes an appearance as well. Hand in hand with this admirable interest is increased curiosity about socially responsible investing (SRI) and broader environmental, social, and governance (ESG) themes. Perhaps more surprisingly, the most popular article of 2017 is about professional ethics, with Vanguard founder Jack Bogle arguing that strong professional ethics must triumph over greed.

Most obviously, investors still struggle to understand the unintended consequences of the monetary policy experimentation of the last decade. What can we learn from downloads of CFA Institute publications in 2017? Posted In: Alternative Investments, Behavioral Finance, Economics, Equity Investments, Fixed Income, Performance Measurement & Evaluation, Portfolio Management, Private Wealth Management, Quantitative Methods, Standards, Ethics & Regulations (SER)