Where can Indexes - and Factors - Fall Short?
Speaker:
Jeromey Thornton, CFA
Vice President & Senior Investment Director
Avantis Investors®
Date/Time:
Tuesday, December 9th
12:00 pm to 1:00 pm
Location:
Virtual through Zoom
This presentation is pending approval for 1 CFP CE.
About the Presentation: Financial science and our understanding of what drives asset prices have evolved considerably. The implications for the financial services industry have also been significant, including the introduction of passive index funds, single-factor and multi-factor strategies. Recent studies have highlighted that the rise in indexing has been driven by asset class segment, or non-total market index funds. While index-based strategies offer transparency in exposures, any non-total market index involves active decision making in both design and ongoing execution.
What we'll cover:
- Examine some of the similarities and differences in how indices define asset classes and manage reconstitution.
- Contemplate whether factor-building has been overdone and examine the risks of becoming too factor-focused.
- Highlight some of the constraints these decisions can place on index trackers.
- Propose how a systematic approach can deliver benefits commonly associated with indexing while removing artificial constraints.
Learning Objectives:
- Advisors will get an in-depth look at the data behind various indexes to better understand the tracking error between indexes targeting the same asset class.
- Advisors will also better understand the overlap between indexes targeting different asset classes.
- Advisors should have a better understanding of the similarities/differences of popular indexes by the end of the presentation.
- This talk also explores the evolutions in academic research around targeting higher expected returns, and how advisors might implement those approaches for their clients.
About the Speaker:
Jeromey Thornton, CFA - Vice President & Senior Investment Director
Jeromey is a senior investment director at Avantis Investors®. In this role, Jeromey meets with advisors and institutions to discuss investment topics and explain Avantis’ investment capabilities. He also directs and coordinates content development surrounding Avantis’ investment approach and solutions.
Prior to joining Avantis Investors, Jeromey was the head of product management at Dimensional Fund Advisors, where he led a global team responsible for promoting the value proposition of Dimensional’s approach and investment products through content development, direct client engagement, and distribution support. In this capacity, he oversaw product marketing and external communications for Dimensional’s entry into the ETF market. Prior to Dimensional, Jeromey was a management consultant at Deloitte Consulting, helping clients solve complex business problems primarily within the financial services industry.
Jeromey earned a Bachelor of Business Administration in management information systems from the McCombs School of Business at The University of Texas at Austin. He is a CFA Charterholder and holds Series 7 and 66 licenses.
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