Overview
ARX receives up to 100 new submissions each month: academic papers, industry research, white papers, market analysis and others. Here is a curated selection of new and noteworthy posts from our institutional and individual contributors.
To browse or search ARX's repository of more than 3000 posts, select "Research" in the upper left-hand corner of the page.
Target Factor Exposure: Investment Applications and Solutions
Factor portfolio construction typically focuses on selecting stocks with desirable factor characteristics. An alternative approach — tilting — achieves desired increases in factor exposure while maintaining appropriate levels of diversification.
19 February 2020 | FTSE Russell: Andy Dougan
Download PDF >Of Fogs and Bogs: Does Litigation Risk Make Financial Reports Less Readable
Companies’ financial reports are often deemed to be opaque and difficult to digest, deepening information frictions and impairing stock liquidity. What role does litigation risk play in the clarity and readability of financial reports?
Winner of the CFA Institute ARX Best Paper Award at the 24th Annual New Zealand Finance Colloquium held on 13-14 February 2020 at Auckland University of Technology in Auckland, New Zealand.
18 February 2020 | Mark Humphery-Jenner, Yun Liu, Vikram Nanda, Sabatino Silveri, Minxing Sun
Download PDF >The Coronavirus Epidemic: Implications for Markets
The economic and market impacts of the COVID-19 coronavirus may be much larger than those of the 2003 SARS virus. Why? China is a much bigger part of the global economy than it was 17 years ago.
12 February 2020 | MSCI: Zhen Wei, Jun Wang, Thomas Verbraken
Read Article >2020 ESG Trends to Watch
ESG themes are long-term, but some can emerge with sudden force. Five trends are expected to unfold in 2020: climate change innovation, new terms of capital, re-valuing real estate, transforming workforce, and accountability to new stakeholders.
13 January 2020 | MSCI ESG Research LLC: Linda-Eling Lee, Meggin Thwing-Eastman, Ric Marshall
Download PDF >Rethinking Commodities
Commodities historically have been used for diversification and inflation protection. But they can also be used as building blocks to express investment themes, as tactical trading tools, and as a component of a multi-asset risk premia allocation.
5 February 2020 | S&P Dow Jones Indices: Fiona Boal, Jim Wiederhold
Download PDF >The Development of the Global Sukuk Market from an Indexing Perspective
The global sukuk market has enjoyed tremendous growth since 2013, with a compound annualized growth rate of nearly 18%, driven by increased issuance from sovereigns and supranationals and strong investor demand for Shariah-compliant securities.
5 February 2020 | S&P Dow Jones Indices: Jason Giordano
Download PDF >The Potential for Quant in the China A-Share Market: A Global Investor's Perspective
The paper takes an objective look at the China A-share market, and with global markets as a reference, attempts to assess the viability and potential challenges of deploying quantitative strategies in China's local market.
5 February 2020 | Eastspring Investments: Ben Dunn, Jie Lu
Download PDF >Revised Draft of Japan's Stewardship Code: CFA Society Japan and CFA Institute Survey Results
In December 2019, the Japan Financial Services Authority (FSA), published a revised draft of Japan's Stewardship Code. CFA Society Japan and CFA Institute conducted a survey of Japan’s investment professionals to gauge their views on the revision.
4 February 2020 | CFA Society Japan, CFA Institute
SRI Investing and Islamic Finance: Similarities and Differences
Although Islamic finance and sustainable, responsible, and impact (SRI) investing appear unrelated, they share key similarities. Emerging trends may enable financial services providers to develop products that satisfy criteria of both approaches.
3 February 2020 | CFA Institute: Usman Hayat, CFA
Download PDF >Indonesia Green Infrastructure Investment Opportunities
Indonesia plans to expand its green infrastructure to achieve positive environmental and economic benefits. The four key sectors are: renewable energy, low-carbon transport, sustainable water management, and sustainable waste management.
1 February 2020 | Climate Bonds Initiative: Kristiane Davidson, Monica Filkova, Nabilla Gunawan, Amanda Giorgi
Download PDF >China’s New Economy Sectors
China’s economy is shifting focus from investment and manufacturing to consumption and services. This paper analyzes China’s growing economic sectors and examines their equity, fundamental, and price performance characteristics.
29 January 2020 | S&P Dow Jones Indices: Liyu Zeng, Priscilla Luk, Sun Yan
Download PDF >Travelution in Southeast Asia: Trends in Travel Technology
A report on travel-tech in Southeast Asia illustrates the landscape, analyses the trends, and highlights opportunities of investing into early-stage travel-tech companies. It points towards a convergence between travel industry and other sectors.
16 January 2020 | Vynn Capital: Victor Chua Kok Hoe, Shivan Bhavnani
Download PDF >Attention and Housing Search: Evidence from Online Listings
A study of fluctuations in buyers’ attention to the housing market and their effects on home sales shows that buyers respond positively to price growth. They search more extensively, cover a broader range of locations and property characteristics.
Winner of the ARX-sponsored best paper award at the Finance, Property, Technology, and the Economy Conference, organised by the University of South Australia Business School, held in Adelaide, Australia, on 2–3 December 2019.
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The Role of Korean Institutional Investors in ESG Investing
Environmental, Social and Governance (ESG) investing is increasingly gaining attention in Korea as such investments are expanding internationally. Korean institutional investors are less active in utilizing ESG investing principles than foreign institutional investors. Stronger means are needed to induce Korean institutional investors to move beyond short-term-oriented perspectives and embrace ESG investing.
9 January 2020 | Ick Jin
Download PDF >Goodwill Amortization Debate
A series of papers in which the International Valuation Standards Council explores whether goodwill is economically a wasting asset, and if so, if the life and implicit decline in value can be reasonably estimated and supported.
8 January 2020 | International Valuation Standards Council (IVSC), Kevin Prall
Part 1: Is Goodwill a Wasting Asset? >
Part 2: Information Value of the Impairment Test >
Career Insights: Proprietary Desk (Webinar)
Proprietary desk is an emerging area in investment management offering enormous career opportunities for budding professionals. Its mandate is to invest money from a company’s own balance sheet and generate an absolute return from the equity market that should be better than the return from fixed-income instruments
28 November 2019 | Biswarup Mohapatra, CFA, Biharilal Deora, CFA, CIPM | 1 CE | Video: 1 hr 5 min
For more "Career Insights" webinars, visit the Webinars section or browse ARX posts under Research.
Practitioners’ Insights: Passive Investing in an Active World (Webinar)
Passive strategies have been attracting a large pool of investors who want to generate market returns at a relatively lower cost. However, in India they have not yet gathered as much momentum. We discuss passive investing approaches that wealth advisers and financial planners could use, and how to use passive strategies to balance an active approach.
3 October 2019 | Anil Ghelani, CFA, Shreenivas Kunte, CFA, CIPM | 1 CE | Video: 1 hr 9 min
For more "Practitioners' Insights" webinars, visit the Webinars section or browse ARX posts under Research.
Blending Low Volatility with Dividend Yield in the China A-Share Market
Excluding high volatility stocks from a high-dividend-yield portfolio may reduce portfolio volatility and improve portfolio returns on a risk-adjusted basis, delivering a stable income from dividends and reduced drawdown during down markets.
31 December 2019 | Xiaoya Qu, Liyu Zeng, Priscilla Luk
The Next Decade: The Ebbing Waves
The report extends a theory about the short-to-intermediate economic cycle into the longer term. In theory, the short and intermediate cycles should join into a conjuncture in which interplay of movements makes up the direction of the economy.
30 December 2019 | Hao Hong, CFA
Download PDF: < English > < Chinese >
This publication has been assigned 1 Continuing Education (CE) credit under the guidelines of the CFA Institute Continuing Education Program. We encourage CFA Institute members to login to the CE tracking tool to self-document these credits. You can find more CE content in the Continuing Education section of ARX.
Bangladesh Steel Industry
Bangladesh is one of Asia's leading emerging steel markets and has a growing need for raw materials and steel-making technologies. Fortunately, the country has a proud heritage of steel making, with over 400 steel, re-rolling and auto-re-rolling mills.
29 December 2019 | Mohammad Asrarul Haque, Abdullah Arif
Download PDF >Economic Analysis for Non-Economists: The Investment Case for Myanmar 2019
This technical note attempts to assist non-economists in the task of performing an initial economic analysis for an emerging market economy (using Myanmar as a case study), primarily for the purpose of underwriting a cross-border investment.
27 December 2019 | Paul Anslow
Download PDF >Golfing for Information: Social Interactions and Economic Consequences
Social interactions of company directors at golf courses allows them to acquire information that helps realize higher profits. Such interactions help developers buy new land and sell new units at lower prices, but there are spillover effects.
Winner of the best paper award at the 32nd Australasian Finance and Banking Conference organised by the Institute of Global Finance and the School of Banking and Finance, UNSW Business School, held in Sydney, Australia, on 16-18 December 2019. View all AFBC 2019 submissions.
Download PDF >
Amendments to Japan's Foreign Exchange and Foreign Trade Act (FEFTA)
The proposed amendment to FEFTA lowers the ownership threshold in companies deemed to be nationally sensitive from 10% to 1% before government pre-approval is required for foreign shareholders. We surveyed investors about this change.
16 December 2019 | CFA Society Japan, CFA Institute
Innovation and Ultimate Controlling Shareholders in China: Should the State Shrink Itself to Residuals?
An analysis of 2,739 listed firms in China looks at state-owned enterprises and those with non-state controlling ownership, to examine the effects of ownership structure on corporate innovation performance in a transition economy.
Winner of the CFA Asia Pacific Research Exchange Award at the 2019 New Zealand Finance Meeting, held at the Auckland Centre for Financial Research, Auckland University of Technology in Auckland, New Zealand, on 18-20 December 2019.
12 December 2019 | Yongjia (Rebecca) Lin, Xiaoqing (Maggie) Fu, Xiaolan Fu
Revisiting the Power of Passive Investing
How powerful is passive investing today? Take an in-depth look at the active vs. passive debate with Rick Ferri of Ferri Investment Solutions and S&P DJI’s Craig Lazzara.
18 November 2019 | S&P Dow Jones Indices | Video: 10 min.
Factor Investing Considerations: Questions and Answers
Portfolio construction methods are many and varied, particularly when it comes to the creation of portfolios exposed to common factors, such as value, size and quality. In this paper, FTSE Russell addresses questions frequently asked by clients.
4 December 2019 | FTSE Russell
FTSE Russell China Bond Research Report - November 2019
Despite macroeconomic headwinds, in July 2019 China’s regulators announced more liberalization measures to open up its financial markets. Holdings of RMB-denominated bonds by offshore investors hit 2 trillion RMB for the first time in Q3 2019.
4 December 2019 | FTSE Russell
How Climate Change Could Impact Sovereign Risk
Climate change has implications for sovereign risk in both advanced and emerging economies, via changes in fiscal policy, social contract and political stability. Physical risks correspond to the potential economic and financial losses caused by climate-related hazards. Transition risks can be defined as the risk of economic dislocation and financial losses associated with the process of adjusting to a low-carbon economy.
4 December 2019 | FTSE Russell
Investing in Emerging Market Equities: Developing and implementing strategies that balance risk and reward
The report sponsored by FTSE Russell, featuring whitepapers, interviews, and roundtable debates. It covers tensions, tariffs and trade wars; balancing risk and reward; the business growth cycle in global emerging markets and the role of China.
4 December 2019 | Clear Path Analytics, FTSE Russell
Bridging the Gap in Green Bond Standards Between China and the West
Based on the different views of the concept of ecological civilization, the paper identifies major differences in green bond standards between China and the West, and makes suggestions for a better coordinated development of the global green bond market.
28 November 2019 | Suyang Liu, Zhiting Yun, Ziyue Zhou
This publication has been assigned 0.5 Continuing Education (CE) credits under the guidelines of the CFA Institute Continuing Education Program. We encourage CFA Institute members to login to the CE tracking tool to self-document these credits. You can find more CE content in the Continuing Education section of ARX.
Sales Inducements in Asia Pacific: A review of sales and distribution of mutual funds
The report examines regulations and practices regarding sales commissions and fees paid to financial advisers in Australia, Hong Kong SAR, India, and Singapore. It evaluates regulatory initiatives intended to reduce conflicts of interest and improve customer outcomes.
25 November 2019 | Mary Leung, CFA; Sara Cheng, JD; Piotr Zembrowski, CFA | 3 CE
Managing Short- and Long-Term Risks with ESG
ESG indexing has entered a new era, bringing sharper tools built with deeper data to an expanding risk management toolkit. S&P DJI’s Shaun Wurzbach leads a discussion that takes a practical look at using ESG to measure and manage risk.
18 November 2019 | S&P Dow Jones Indices | Video: 9 min.
Do Commissions Cause Investment Adviser Misconduct?
A study of US-based financial advisers shows that as advisers gain the opportunity to earn commissions, the probability of them engaging in misconduct increases. However, industry competition reduces the incidence of misconduct.
This paper has been submitted to the 2019 Australasian Finance & Banking Conference organised by the Institute of Global Finance and the School of Banking and Finance, UNSW Business School. See all AFBC 2019 submissions.
20 November 2019 | Tarun Patel
Systemic Risk and Its Determinants: Fresh Evidence from the Australian Banking Sector
Despite the introduction of deposit insurance scheme and more stringent capital requirements, systemic risk of the Australian banking sector after the global financial crisis in 2008 is typically higher than in the pre-crisis period.
This paper has been submitted to the 2019 Australasian Finance & Banking Conference organised by the Institute of Global Finance and the School of Banking and Finance, UNSW Business School. See all AFBC 2019 submissions.
20 November 2019 | Md Lutfur Rahman, Victor Troster, Gazi Salah Uddin, Muhammad Yahya
Predictability of ICO Success and Returns
An empirical study of 432 initial coin offerings (ICOs) identifies factors - such as investor sentiment, time horizon and correlation with other assets - that can provide predictability of an ICO’s success and its returns.
This paper has been submitted to the 2019 Australasian Finance & Banking Conference organised by the Institute of Global Finance and the School of Banking and Finance, UNSW Business School. See all AFBC 2019 submissions.
19 November 2019 | Tobias Dean, D Dulani Jayasuriya, Alastair Marsden
Does Diversification of Share Classes Increase Firm Value?
In 2011 Korea significantly relaxed regulation of shares, giving firms greater freedom to choose which share classes they issue. How are issuers using two newly emergent classes of preferred stocks and what effect does it have on the firms’ value?
This paper has been submitted to the 2019 Australasian Finance & Banking Conference organised by the Institute of Global Finance and the School of Banking and Finance, UNSW Business School. See all AFBC 2019 submissions.
19 November 2019 | Sojung Kim, Sunwoo Hwang, Woochan Kim
About the Author(s)
Director: Scott Lee
Content manager, Editor: Piotr Zembrowski, CFA
Coordinator: Natalie Yiu