5 Hot Topics From The 2017 CFA Institute Annual Conference

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Every year, thousands of financial professionals converge on the CFA Institute Annual Conference for a deeper understanding of the financial landscape and the opportunity to connect with industry thought leaders.

FactSet has long been a supporter of this conference, and if you were in Philadelphia earlier this week, you may have heard one of our CFA charterholders, Elisabeth Kashner speak on emerging trends in the ETF industry.

Whether you were on-site for the conference or not, the session topics in focus offer a great framework for better understanding the financial world in 2017. Here’s a rundown of what just a few of the CFA charterholders at FactSet are saying about the topics of conversation from this year’s conference. (And good luck to the 120 FactSetters sitting for the CFA exam on June 3, who hope to soon be among them.)

Asset Risk and Allocation

Forecasting the Unforeseeable: Government Policy Risk Management

Enterprise risk management is typically siloed into three areas: Market risk, which is related to investment risk; Credit risk, which is related to obligor default management; and Operational risk, which is the control of bad outcomes due to processes and procedures.

Each silo has developed a toolkit to deal with its unique issues, but the toolkits do not completely address all types of risk neatly. For instance, how should the market impact on reactions to government policy be characterized?

In this article, Bill McCoy, CFA, proposes an analytical approach that can help investment managers account for risks created by unanticipated policy shifts.

Alternative Investments

Overcrowding in the Alternatives Market

There has been a flood of capital into the alternative asset market over the past couple of years, particularly into private equity, leading to questions about whether the market is overcrowded. But, how do we know if it is overcrowded, and if it is, what is the potential impact?

In this piece, Drew J. Cronin, CFA, CIPM, evaluates trends in alternative asset allocations and discusses how they’ve evolved for the better and the worse over the past several decades.

Equity Investments

Equity Attribution and the Delicate Art of Interaction

Arguably, the king of equity attribution is the Brinson-Fachler attribution model, and the most common question around the model is what to do with interaction?  Allocation and selection stand alone and can be easily explained to an investor. Interaction, however, presents a trickier problem.

Alison J. Stewart, CFA demonstrates how managers can employ a three-factor attribution method to account for interaction and tell a more complete story about their performance in the process.

Fixed Income Management

What to Expect in a Higher Rate Environment

In March, the Federal Open Market Committee (FOMC) announced that it was raising the target range for the federal funds rate by 25 basis points to 0.75-1.0% while predicting two more hikes in 2017. In this piece, Insight contributors discuss the likely effects of these changes in the areas of earnings, economics, M&A, and fixed income.

Private Wealth Management

What Ultra High Net Worth Clients Want from Wealth Managers

For the most valued clients—the ultra high net worth, with over $10 million in investable assets—high quality information has never been so important. Our recent research shows those at the upper end of the wealth curve are increasingly risk averse and actively seeking detailed insights about their investments.

Here, Greg King, CFA, explains how advisors will need to share portfolio data more often and demonstrate secure technology to attract these clients.

Article By FactSet

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