Practical analysis for investment professionals
23 December 2015

Best of 2015: Asia Pacific Markets for Global Investors

Posted In: Best Of

Though global trade was growing at its slowest pace since 2009, East Asia remained one of the main growth drivers of the world economy. Over the last year we continued bringing you updates on industry developments in the Asia Pacific region, as well as insights from thought leaders from both the industry and academia. Below is a selection from the pool of content that we produced in 2015.

1. Investment Skills for Investors in Asia and around the World

We always focus on highlighting theoretical developments that practitioners can benefit from and below is one example. When I first met Andrew Karolyi a year ago, what intrigued me about his research was not only its academic rigor but also its huge potential in helping practitioners tackle real world issues.

We have written extensively on the subject, here and in trade publications, and found two important applications this year alone: MSCI’s decision not to include China A shares in its emerging market index, and IMF’s decision to accept RMB into the SDR currency basket. (More on the latter later.)

We also dedicated six blog posts to the topic of mutlti-asset strategies. An industry survey indicated two-thirds of asset managers around the world consider this to be the strategy that will drive growth (vs. 17%, who voted for traditional actively managed equity, the second most popular choice). The product’s importance to investors is obvious, given where most of our retirement money is invested. The mutlti-asset strategies series is largely based on a number of panels I moderated at industry events in the region at which panelists hailed from some of the largest and smartest asset owners, as well as interviews I conducted with Myron Scholes, the Nobel laureate of Black-Scholes fame, and Jason Hsu of Research Affiliates.

And we never miss a single opportunity to write about Warren Buffet’s investment wisdom, especially not when he opened his secret recipe book in Berkshire Hathaway’s 50th Anniversary Annual Report. I was also invited by HKSFA to speak on the topic.

2. Market Development and Industry Trends in the Asia Pacific Region

A sign of the Asia Pacific region’s increasing importance was, unfortunately, how turbulence in the Chinese stock market last summer rippled across global financial markets. Given our members’ superior understanding of this issue, we thought no one could address this issue better than Robert Engle, who is the authority on market volatility. Better yet, his Volatility Institute had actually set up shop in China to study the local markets, so he actually had much original insights to share that actually originated from his work in the region. We hosted a dialogue with Engle on the subject in Shanghai last month and broadcast the event live to our members in Beijing, Chengdu, Dalian, Hangzhou, Mumbai, Shenzhen, and Singapore. You can watch the recording below.

As discussed above, development of market institutions is critical for an emerging market to eventually graduate into the more “developed” world. There have been many related developments in the region this year: RMB’s acceptance into the SDR, signing of the TPP, mutual recognition of funds between China and Hong Kong, just to name a few. Below are some of our writings on these subjects.

As a service to our members, President and CEO Paul Smith facilitated a panel of senior industry professionals and discussed career-impacting investment industry trends. A few hundred members with HKSFA and CFA Phillipines, Thailand, and Singapore participated either live or online.

For readers who actively follow the developments in China and India, we will continue to keep an eye on the major issues for you as well. Below are two examples.

We look forward to continue serving you with a healthy dose of Asia Pacific content in the coming year. Do please leave your comments below and let us know how we are doing. We also welcome your thoughts on subjects you’d like to us to start talking about or provide more coverage of. Thank you for reading, and here’s us wishing you a happy Year of the Monkey!

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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

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About the Author(s)
Larry Cao, CFA

Larry Cao, CFA, senior director of industry research, CFA Institute, conducts original research with a focus on the investment industry trends and investment expertise. His current research interests include multi-asset strategies and FinTech (including AI, big data, and blockchain). He has led the development of such popular publications as FinTech 2017: China, Asia and Beyond, FinTech 2018: The Asia Pacific Edition, Multi-Asset Strategies: The Future of Investment Management and AI Pioneers in Investment management. He is also a frequent speaker at industry conferences on these topics. During his time in Boston pursuing graduate studies at Harvard and as a visiting scholar at MIT, he also co-authored a research paper with Nobel laureate Franco Modigliani that was published in the Journal of Economic Literature by American Economic Association. Larry has more than 20 years of experience in the investment industry. Prior to joining CFA Institute, Larry worked at HSBC as senior manager for the Asia Pacific region. He started his career at the People’s Bank of China as a USD fixed-income portfolio manager. He also worked for US asset managers Munder Capital Management, managing US and international equity portfolios, and Morningstar/Ibbotson Associates, managing multi-asset investment programs for a global financial institution clientele. Larry has been interviewed by a wide range of business media, such as Bloomberg, CNN, the Financial Times, South China Morning Post and the Wall Street Journal.

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