SECTION I

CFA INSTITUTE RESEARCH

GROUP REPORT

Rhodri Preece, CFA

Senior Head, Industry Research

CFA Institute

The CFA Institute Research Foundation complements the wider activities of the research division of CFA Institute, which also comprises journal publications (Financial Analysts Journal and CFA Digest), the Future of Finance initiative, and the Enterprising Investor blog.

Our aim is to develop research relevant to the investment management industry that advances knowledge, understanding, and professionalism of CFA Institute members, practitioners, and industry leaders.

To achieve this goal, we produce a spectrum of research across our publications platforms, providing investment professionals with a balance of rigorous in-depth research, forward-looking thought leadership content, applied investment insights, and commentary on trending investment topics.

In addition to the work accomplished by the Research Foundation encapsulated in this review, the research group’s activities in 2019 included the publication of several reports and outreach with industry stakeholders to advance our thought leadership agenda, among other initiatives.

In Future of Finance, our flagship publication in 2019 was “Investment Professional of the Future,” which analyzes individual roles, skills, and organizational cultures in the investment profession. It examines how technological disruption and other trends will shape investment jobs and the structure of investment teams in the future. This research builds on earlier work that examined the drivers of change in the investment industry and their implications for investment firms. The research was launched in May 2019 and has attracted more than 10,000 downloads to date, in addition to leading to numerous industry engagements.

The emergence of artificial intelligence (AI) in the investment industry has captured much attention among investment professionals. To help individuals and firms better make sense of the potential use cases, opportunities, and hurdles to successfully deploying AI technologies, we published “AI Pioneers in Investment Management” in September 2019. The report contains a collection of case studies with firms from across the globe that illustrate where and how to use AI and big data in investment processes.

In journal publications, we maintained our regular publishing cycle of high-quality research articles. The Financial Analysts Journal, our flagship publication, continues to experience growth in article submissions and citations, and our “impact factor”—an academic measure of article quality based on citations—rose from 1.413 to 1.816 over the year. The Graham and Dodd Award for 2019, which recognizes excellence in research and financial writing in the Financial Analysts Journal, was given to Jason Hsu, Vitali Kalesnik, and Engin Kose for their article “What Is Quality?,” which examines the “quality” factor and the robustness of different measures that are associated with a return premium. Looking ahead, the Financial Analysts Journal will celebrate its 75th anniversary in 2020, which will be marked with several activities and special articles.

Environmental, social, and governance (ESG) considerations continue to feature in industry debates and in the development of investment strategies and products. To support high-quality research on ESG issues and the expansion of the body of knowledge, CFA Institute has participated in two academic research networks: The Global Research Alliance for Sustainable Finance and Investment (GRASFI), through which the Financial Analysts Journal sponsored two paper prizes in 2019, and the Principles for Responsible Investment (PRI) academic network advisory committee. In addition, in December 2019, we published “Sustainable, Responsible, and Impact Investing and Islamic Finance: Similarities and Differences.” The research provides an entry point for investment professionals to explore Islamic finance and socially responsible investing approaches, highlighting the ethical orientation of both. ESG issues will continue to feature in our research agenda in 2020.

Our research blog platform, Enterprising Investor, is a forum for provocative analysis of current issues in finance and investing. Over the course of 2019, Enterprising Investor experienced growth in authors and subscribers. We attracted an average of more than 90,000 visitors each month, receiving a total of more than 1.3 million article views. Views have grown by approximately 50% year on year (at the time of writing).

The Research Foundation is an integral part of the wider research offering of CFA Institute, and the publication of this review provides a perfect companion to the other reports and activities highlighted herein. We hope you find the material insightful and thought provoking.