Wednesday, 18 June 2014 10:55
100 delegates take part in ETF summit
Commodities and the foundations of factor investing have been among the topics of discussion at a summit on ETFs in London this morning.
About 100 delegates have attended the AJ Bell hosted event, which is featuring a range of expert speakers.
Neil Jamieson, head of UK and Ireland at ETF Securities, examined the rationale for commodities.
He looked at the factors that are important in the selection of broad commodity exposure and the tactical implementation.
He said: "In short, commodities can bring diversification benefits to portfolios through their ability to generate above average returns when equities are delivering below average returns.
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"The entry point for many investors has been via a physically-backed gold product or exposure to a broad commodity index."
Mehdi Alighanbari, vice president of Applied Research, took delegates through issues surrounding the foundations of factor investing.
He said a large body of academic research has highlighted that long term equity performance may be explained thorough factors and looked in more depth at what a factor is.
He discussed what causes risk premia and how persistent these effects are.
He said: "There are two main views of why these excess returns exist which result from different perspectives on market efficiency. The first is systematic risk and the second is systematic errors."
He concluded by saying: "Some investors will prefer higher capacity approaches for their lower tracking error, investability and simplicity, while others will prefer the higher exposure approaches for their stronger signal strength and potential return enhancement.
"Investors must make a self assessment of where they desire to be on the pyramid."
The summit is taking place at Charing Cross Hotel and runs into mid afternoon.
Todd Schlanger, an investment analyst from Vanguard, will be among the speakers later today.
About 100 delegates have attended the AJ Bell hosted event, which is featuring a range of expert speakers.
Neil Jamieson, head of UK and Ireland at ETF Securities, examined the rationale for commodities.
He looked at the factors that are important in the selection of broad commodity exposure and the tactical implementation.
He said: "In short, commodities can bring diversification benefits to portfolios through their ability to generate above average returns when equities are delivering below average returns.
{desktop}{/desktop}{mobile}{/mobile}
"The entry point for many investors has been via a physically-backed gold product or exposure to a broad commodity index."
Mehdi Alighanbari, vice president of Applied Research, took delegates through issues surrounding the foundations of factor investing.
He said a large body of academic research has highlighted that long term equity performance may be explained thorough factors and looked in more depth at what a factor is.
He discussed what causes risk premia and how persistent these effects are.
He said: "There are two main views of why these excess returns exist which result from different perspectives on market efficiency. The first is systematic risk and the second is systematic errors."
He concluded by saying: "Some investors will prefer higher capacity approaches for their lower tracking error, investability and simplicity, while others will prefer the higher exposure approaches for their stronger signal strength and potential return enhancement.
"Investors must make a self assessment of where they desire to be on the pyramid."
The summit is taking place at Charing Cross Hotel and runs into mid afternoon.
Todd Schlanger, an investment analyst from Vanguard, will be among the speakers later today.
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