SECTIONS
SECTION IV

Briefs

Summaries

Foundations of High-Yield Analysis

Since the advent some 40 years ago of a vibrant primary market for speculative-grade corporate bonds, the high-yield market has evolved from a niche occupied by a small group of specialists into a full-fledged institutional investment category. Asset allocators and portfolio managers now have at their disposal the tools necessary for rigorous investment analysis, including financial statements of the issuers,
indexes, trading prices, historical default rates, and time series on such credit factors as liquidity, ratings, and covenant quality. This research brief provides up-to-date techniques for extracting from the extensive data the information that can lead to sound investment decisions.
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Latin American Local Capital Markets: Challenges and Solutions

Economic growth depends on the efficient allocation of resources, including the two main factors of production: labor and capital. Markets, operating on each factor, have allocated these resources in economies worldwide in ways that arguably approach optimality and have fostered economic development for the 
benefit of billions. Capital markets, both for debt and equity securities, have allowed firms to secure funding for productive uses while providing investors with opportunities for portfolio diversification. The importance of capital markets for the development of economies and for the betterment of society cannot be overstated.
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Mainstreaming Sustainable Investing

“Mainstreaming Sustainable Investing” is the title, tagline, and guiding principle of the annual Sustainable Investing Seminars run by CFA Society Boston since 2013. In that first year, the idea of “mainstreaming” sustainable investing seemed wildly aspirational to many.
Yet by the time the society held its fourth annual seminar in November 2016, aspiration had been surpassed by reality, as the increasing attendance and diversity of the audience reflected the change that was underway in the industry.
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RISK TOLERANCE AND CIRCUMSTANCES

The term risk tolerance is defined and used in different ways. Whether risk tolerance is a stable characteristic of a given investor or also takes into account external circumstances (e.g., economic shocks or the domain of the decision) depends on how it is defined and measured. This brief focuses on a definition of risk tolerance prevalent in the practitioner 
community—namely, an investor’s willingness to take perceived risk or the trade-off an investor is willing to make between the perceived risk and expected return of different investment choices. This definition derives from a psychological interpretation of the risk–return framework of classical portfolio theory.
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RISK PROFILING AND TOLERANCE: INSIGHTS FOR THE PRIVATE WEALTH MANAGER

If risk aversion and willingness to take on risk are driven by emotions and we as humans are bad at correctly identifying the emotions, then the finance profession has a serious challenge at hand: how to identify reliably the individual risk profile of a retail investor or high-net-worth individual. 
In this series of CFA Institute Research Foundation briefs, we have asked academics and practitioners to summarize the current state of knowledge about risk profiling in different key areas.
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Some Like It Hedged

Foreign currency exposure is a by-product of international investing. When obtaining global asset exposure, investors also obtain the embedded foreign currency exposure. In “Some Like It Hedged,” the author shows that the impact
of foreign currency exposure on institutional portfolios depends significantly on the base currency of the investors and the specific composition of their portfolios.
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Do you know....?

YOU'RE RIGHT!

Answer: 30,000. Working with 92 societies in 2018, the Research Foundation was able to distribute roughly 30,000 copies of its publications globally.

VERY CLOSE!

Answer: 30,000. Working with 92 societies in 2018, the Research Foundation was able to distribute roughly 30,000 copies of its publications globally.

Briefs Summaries

Multimedia Summaries