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Risk Management


Top Five Articles from March: Cover Letters, Hedge Funds, Active Equity
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Julia VanDeren shares some insights on giving presentations and writing cover letters; Ben Carlson, CFA, discusses how to determine which hedge funds to invest in; Mark Harrison, CFA, curates the best content on smart beta and factor investing; and C. Thomas Howard and Jason Voss, CFA, offer some advice on how to revive active equity, in the top Enterprising Investor Posts from March.

Where Markets Fail: Markets Assume Fungibility
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Markets are useful but imperfect, says Jason Voss, CFA. One imperfection is that they assume fungibility. Assuming that a dollar spent on one thing is equivalent to a dollar spent on something else has serious consequences for investors.

Fundamental Indexing in the Bond Market: An Interview with Lidia Bolla, CFA
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Lidia Bolla, CFA, takes the basic model of factor exposure and applies it to the concept of fundamental indexing in the bond market in her new article, "Fundamental Indexing in the Global Bond Markets: The Risk Exposure Explains It All." She discusses her findings in an interview with Ron Rimkus, CFA.

Politics Matters — Sometimes
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Investors need to become experts in the rapid assessment of geopolitical events to be successful in the coming years.

Shortcuts to Factor Investing 101
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If investors have the option to cheaply replicate their desired exposures to help solve their portfolio problems, then why shouldn't they? Mark Harrison, CFA, curates the latest insights on what is meant by smart beta and factor investing and how they differ.

Where Markets Fail: Markets Assume a Context
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Markets assume a context entirely out of view of their participants, which can have deleterious effects for both suppliers and demanders, Jason Voss, CFA, observes in the latest installment of his Where Markets Fail series.

Top Five Articles from January: Regtech, Fintech, and the War on Cash
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Highlights from the past month include a critique of the war on cash by Ron Rimkus, CFA; the future of blockchain technology as explored by Larry Cao, CFA; a review of an Antti Ilmanen presentation by Mark Harrison, CFA; an analysis of how investors can add value through meditation by Jason Voss, CFA; and an update on the 2017 regtech revolution from April J. Rudin.

Count on Low Expected Returns, Says Antti Ilmanen
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“It is not only a low interest rate world, it is also a low expected return world on any long-only investment,” said Antti Ilmanen, in his presentation at the 2016 CFA Institute European Investment Conference. Low expected returns are going to anchor bad news for all of us for the rest of our working lifetimes, he said, and maybe beyond.

Antti Ilmanen Describes a Harsh Winter for Expected Returns
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AQR's Antti Ilmanen sees three distinct investing scenarios in the future: Slow pain, fast pain, or 2008 all over again. What are investors to do?

Best of 2016: Active Management Fights Back
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Mark Harrison, CFA, provides a list of the most popular articles of 2016 from CFA Institute's Financial Analysts Journal and CFA Digest.