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Factor Investing
Factor investing is an investment approach that involves targeting quantifiable firm characteristics or "factors" that can explain differences in stock returns. Security characteristics that may be included in a factor-based approach include size, low-volatility, value, momentum, asset growth, profitability, leverage, term and carry. A factor-based investment strategy involves tilting investment portfolios towards or away from specific factors in an attempt to generate long-term investment returns in excess of benchmarks. Proponents claim this approach is quantitative and based on observable data, such as stock prices and financial information, rather than on opinion or speculation. Factor premiums are also documented in corporate bonds and across all major asset classes including currencies, government bonds, equity indices, and commodities. Critics of factor investing argue the concept has flaws, such as relying heavily on data mining that does not necessarily translate to rea ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Investment Management
Investment management (sometimes referred to more generally as financial asset management) is the professional asset management of various Security (finance), securities, including shareholdings, Bond (finance), bonds, and other assets, such as real estate, to meet specified investment goals for the benefit of investors. Investors may be institutions, such as insurance companies, pension funds, corporations, charities, educational establishments, or private investors, either directly via investment contract, contracts/mandates or via collective investment schemes like mutual funds, exchange-traded funds, or REIT, Real estate investment trusts. The term ''investment management'' is often used to refer to the management of investment funds, most often specializing in private equity, private and public equity, real assets, alternative assets, and/or bonds. The more generic term ''asset management'' may refer to management of assets not necessarily primarily held for investment purpos ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Market Liquidity
In business, economics or investment, market liquidity is a market's feature whereby an individual or firm can quickly purchase or sell an asset without causing a drastic change in the asset's price. Liquidity involves the trade-off between the price at which an asset can be sold, and how quickly it can be sold. In a liquid market, the trade-off is mild: one can sell quickly without having to accept a significantly lower price. In a relatively illiquid market, an asset must be discounted in order to sell quickly. A liquid asset is an asset which can be converted into cash within a relatively short period of time, or cash itself, which can be considered the most liquid asset because it can be exchanged for goods and services instantly at face value. Overview A liquid asset has some or all of the following features: it can be sold rapidly, with minimal loss of value, anytime within market hours. The essential characteristic of a liquid market is that there are always ready and wil ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Federated Hermes
Federated Hermes is an investment manager headquartered in Pittsburgh, Pennsylvania, United States. Founded in 1955 and incorporated on October 18, 1957, the company manages $829.6 billion of customer assets, as of December 2024. The company offers investments spanning equity, fixed-income, alternative/private markets, multi-asset and liquidity management strategies, including mutual funds, exchange-traded funds (ETFs), separate accounts, closed-end funds and collective investment funds. Clients include corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. History Federated Investors was founded in 1955 by high school classmates John F. Donahue, Richard B. Fisher, and Thomas J. Donnelly. Aetna acquired a majority ownership stake in Federated Investors in 1982; at the time Federated had nearly $30 billion in assets under management. In 1989, Federated management purchased Aetna's stake for $345 million, reestablishing ma ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Campbell Harvey
Campbell Russell "Cam" Harvey (born June 23, 1958) is a Canadian economist, known for his work on asset allocation with changing risk and risk premiums and the problem of separating luck from skill in investment management. He is currently the J. Paul Sticht Professor of International Business at Duke University's Fuqua School of Business in Durham, North Carolina, as well as a research associate with the National Bureau of Economic Research in Cambridge, Massachusetts. He is Senior Fellow at the Oxford-Man Institute at the University of Oxford. He served as the 2016 president of the American Finance Association. Career He graduated from Royal St. George's College in 1977 earned his undergraduate degree in economics and political science from Trinity College at the University of Toronto in 1981 and his MBA from York University in Toronto in 1983. His doctoral work was carried out at the Booth School of Business at the University of Chicago. His doctoral supervisors were Eugen ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Rob Arnott
Robert D. Arnott (born June 29, 1954) is an American businessman, investor, and writer who focuses on articles about quantitative investing. He is the founder and chairman of the board of Research Affiliates, an asset management firm. Research Affiliates develops investment strategies for other firms, and there are over US$166 billion assets under the management of firms using their strategies as of September 2021. He edited CFA Institute's ''Financial Analysts Journal'' from 2002 to 2006, and has edited three books on equity management and tactical asset allocation. Arnott is a co-author of the book ''The Fundamental Index: A Better Way to Invest'', and co-editor of three other books relating to asset allocation and equity market investing. Arnott has also served as a Visiting Professor of Finance at the UCLA Anderson School of Management, on the editorial board of the ''Journal of Portfolio Management'', the product advisory board of the Chicago Mercantile Exchange, and the C ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
January Effect
The January effect is a hypothesis that there is a seasonal anomaly in the financial market where securities' prices increase in the month of January more than in any other month. This calendar effect would create an opportunity for investors to buy stocks for lower prices before January and sell them after their value increases. As with all calendar effects, if true, it would suggest that the market is not efficient, as market efficiency would suggest that this effect should disappear. The effect was first observed around 1942 by investment banker Sidney B. Wachtel. He noted that since 1925 small stocks had outperformed the broader market in the month of January, with most of the disparity occurring before the middle of the month. It has also been noted that when combined with the four-year US presidential cycle, historically the largest January effect occurs in year three of a president's term. The most common theory explaining this phenomenon is that individual investors, ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
2008 Financial Crisis
The 2008 financial crisis, also known as the global financial crisis (GFC), was a major worldwide financial crisis centered in the United States. The causes of the 2008 crisis included excessive speculation on housing values by both homeowners and financial institutions that led to the 2000s United States housing bubble, exacerbated by predatory lending for subprime mortgages and deficiencies in regulation. Cash out refinancings had fueled an increase in consumption that could no longer be sustained when home prices declined. The first phase of the crisis was the subprime mortgage crisis, which began in early 2007, as mortgage-backed securities (MBS) tied to U.S. real estate, and a vast web of Derivative (finance), derivatives linked to those MBS, collapsed in value. A liquidity crisis spread to global institutions by mid-2007 and climaxed with the bankruptcy of Lehman Brothers in September 2008, which triggered a stock market crash and bank runs in several countries. The crisis ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Low-volatility Anomaly
In investing and finance, the low-volatility anomaly is the observation that low-volatility securities have higher returns than high-volatility securities in most markets studied. This is an example of a stock market anomaly since it contradicts the central prediction of many financial theories that higher returns can only be achieved by taking more risk. The capital asset pricing model (CAPM) predicts a positive and linear relation between the systematic risk exposure of a security (its beta) and its expected future return. However, the low-volatility anomaly falsifies this prediction of the CAPM by showing that higher beta stocks have historically underperformed lower beta stocks. Additionally, stocks with higher idiosyncratic risk often yield lower returns compared to those with lower idiosyncratic risk. The anomaly is also document within corporate bond markets. The low-volatility anomaly has also been referred to as the low-beta, minimum-variance, minimum volatility an ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Intrinsic Value (finance)
In finance, the intrinsic value of an asset or security is its ''value'' as calculated with regard to an inherent, objective measure. A distinction, is re the asset's ''price'', which is determined ''relative'' to other similar assets. The intrinsic approach to valuation may be somewhat simplified, in that it ignores elements other than the measure in question. Options For an option, the intrinsic value is the absolute value of the difference between the current price (''S'') of the underlying and the strike price (''K'') of the option, to the extent that this is in favor of the option holder. Thus, the option is said to have intrinsic value if the option is in-the-money; when out-of-the-money, its intrinsic value is ''zero''. For an option, then, the intrinsic value is the same as the "immediate value" or the "current value" of the contract, which is the profit that could be gained by exercising the option immediately. Formulaically: :IV_= 0 :IV_=\left \vert S-K ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Dividend Yield
The dividend yield or dividend–price ratio of a share is the dividend per share divided by the price per share. It is also a company's total annual dividend payments divided by its market capitalization, assuming the number of shares is constant. It is often expressed as a percentage. Dividend yield is used to calculate the dividend earning on investments. Analysis Historically, a higher dividend yield has been considered to be desirable among many investors. A high dividend yield can be considered to be evidence that a stock is underpriced or that the company has fallen on hard times and future dividends will not be as high as previous ones. Similarly a low dividend yield can be considered evidence that the stock is overpriced or that future dividends might be higher. Some investors may find a higher dividend yield attractive, for instance as an aid to marketing a fund to retail investors, or maybe because they cannot get their hands on the capital, which may be tied up in a ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Free Cash Flow To Equity
In corporate finance, free cash flow to equity (FCFE) is a metric of how much cash can be distributed to the equity shareholders of the company as dividends or stock buybacks—after all expenses, reinvestments, and debt repayments are taken care of. It is also referred to as the levered free cash flow or the flow to equity (FTE). Whereas dividends are the cash flows actually paid to shareholders, the FCFE is the cash flow simply available to shareholders. The FCFE is usually calculated as a part of DCF or LBO modelling and valuation. Basic formulae Assuming there is no preferred stock outstanding: : FCFE = FCFF + Net\ Borrowing - Interest*(1-t) where: * ''FCFF'' is the free cash flow to firm; * ''Net Borrowing'' is the difference between debt principals paid and raised; * ''Interest*(1–t)'' is the firm's after-tax interest expense. or : FCFE = NI + D\& A - Capex - \Delta WC + Net\ Borrowing or : FCFE = NI - 1-b) (Capex-D\& A) + (1-b) (\Delta WC) where: * ''NI'' is the ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
