Paul Smith, CFA

Active managers always outperform passive managers on a benchmark comparison. So why does nobody seem to care?

Standing before a crowd of more than 2,000 investment professionals from across the world at the 69th CFA Institute Annual Conference in Montréal, CFA Institute president and CEO Paul Smith, CFA, welcomed the assembled guests and issued a rousing call for a more ethical and effective investment profession. He also laid out his vision of where he hopes to lead CFA Institute in the years ahead, offering a road map for how he intends to get there. At the same time, he hailed the tremendous… Show more

Standing before a crowd of more than 2,000 investment professionals from across the world at the 69th CFA Institute Annual Conference in Montréal, CFA Institute president and CEO Paul Smith, CFA, welcomed the assembled guests and issued a rousing call for a more ethical and effective investment profession. He also laid out his vision of where he hopes to lead CFA Institute in the years ahead, offering a road map for how he intends to get there. At the same time, he hailed the tremendous progress that has been made to construct “a stronger, more trustworthy profession that better serves our investor base.” Show less

Calls for a professional code of conduct for investment management practitioners

One of the key buzz words in the investment management industry today is “value.” There are some who question whether investment professionals are capable of providing value anymore to clients. The rising popularity of ETFs, other passive investment tools and Robo advisors (welcomed by the Australian regulator) speak to increasing disillusionment with active management.

You’ve read all sorts of warnings about the coming car wreck that is shadow banking in China. Several shadow banking products are reportedly on the brink of default, and the fear is this will have a domino effect in the banking sector, the local economy, and the global recovery.

An answer to this problem of short-termism is the growing importance and size of Asian institutional investors.

Alibaba’s IPO reminds us of how far away Asia still is in setting best practices for investor protection and of the need for a deeper examination of our corporate governance culture. In this context, the stance of the Hong Kong stock exchange should be applauded. Whether Alibaba is right is not the crux of the matter, the weakness of the wider market infrastructure is.

Throughout Singapore and elsewhere in Asia where it operates, we see an advertisement from one of the region’s biggest banks that says, “Asia’s safest bank.” Five years after the global financial crisis, depositors, investors, and the general public still worry about risk, and assurances seem necessary for them to trust the financial system

If you can’t make it in China, try Southeast Asia.

As of mid-April, Asian high-yield issuances have reached US$18 billion, already exceeding the total for the full year of 2010. Foreign investors are piling on Asian high-yield debt to escape near zero interest rates in Europe, the United States, and Japan.

Regulations set the game rules for financial markets, but only trusted relationships will encourage investors, firms, and governments to play. Not surprisingly, Asia is pushing back.

The newly created Financial Services Development Council is meant to preserve Hong Kong’s edge by finding opportunities in mainland China, promoting the region’s financial services industry overseas, training talent, further developing the financial sector, and encouraging the start-up of new and innovative businesses.