CAIA Viewpoints offer a summary-level look at industry trends and models that continue to shape alternative investment strategies. Each Viewpoint links to the full text of the paper as it appeared in CAIA journals.

September 17, 2018
Know Your Risk

As most media outlets and finance professionals take an introspective look 10 years after the global financial
crisis, we thought it would be apropos to revisit a paper by Andrew Rozanov, CAIA titled “Volatility, NonRandomness
or Non-Linearity: What Drives Portfolio Returns in Times of Stress and Dislocation?” This paper
considers what underlying exposures drive portfolio returns in periods of extreme market stress and dislocation.

September 17, 2018
A Simple Approach to the Management of Endowments

Endowments and foundations are tax exempt and charitable organizations that rely on
permanent pools of capital to fund their activities. Institutions such as colleges, universities,
hospitals, museums, scientific organizations, charitable entities, and religious institutions own
these pools of capital. When well-funded and well managed, an endowment can provide a
permanent annual income to the organization, while maintaining the real value of its assets in

August 07, 2018
A Misdiagnosed Problem

“Reconsidering Hedge Fund Contagion” by Richard Sias, H.J. Turtle and Blerina Zykaj provides an alternative, and contrary, view of hedge fund contagion, hedge fund crowding, hedge funds’ role in the 2007–2008 financial crisis, and hedge funds’ role the 2007 quant crisis.

June 27, 2018
Patience as An Alpha Source

Igor Yelnik of ADG Capital Management wrote the paper "Patience Premium", which introduces the eponymous notion which is based on the concept of ambiguity aversion and ultimately can be defined as an ambiguity premium. The paper identifies three reasons for the existence of the patience premium: certainty preferences, comparison with peers, and loss aversion. The phenomenon of the patience premium helps explain why the performance of investment strategies may benefit from having longer holding periods.

June 26, 2018
A New Target

The paper titled "Designing the Future of Target-Date Funds" revisits target-date fund designs and single manager structures to address the failure of target date strategies to guard against today's heightened retirement risks. The authors indicate that most retirement plans still use traditional designs that were adopted years ago, but fiduciary standards have changed.

May 30, 2018
Is It Time Yet?

In “Market Timing: Opportunities and Risk,” Wim Antoons explores opportunities for enhancing returns using tactical asset allocation and market timing, as well as the challenges posed by market timing, including higher costs and the risk of missing the best-performing days of the market.

May 30, 2018
High Volatility in Low Volatility Equity

In “Tactical Timing of Low Volatility Equity Strategies” by Sanne de Boer and James Norman, the authors attempt to tackle two common concerns about the timing of an allocation. The first is that relative valuation of low volatility stocks may be expensive compared to the rest of the market, so they should wait for more attractive levels. The second is that low volatility stocks, which tend to pay higher dividends, may under-perform against the back-drop of potential rate increases.

April 19, 2018
The Quantamental Approach

In the paper, “Adding Alpha by Subtracting Beta: A Case Study on How Quantitative Tools Can Improve a Portfolio’s Return” by Chris Martin, the author introduces various quantitative tools and uses a “real world” portfolio to illustrate how one could improve a portfolio’s realized returns.

March 30, 2018
Collaborative Model: A New Approach to Invest in Innovation & Energy

To address the many inefficiencies with traditional methods of investing, the authors of the paper titled “From Theory to Practice: The Collaborative Model for Investing in Innovation and Energy” argue that an increasing number of beneficiary organizations, such as pension funds, sovereign wealth funds, endowments and foundations, are adopting a new model of long-term investment management. 

March 27, 2018
Can Cash Remain King?

Professor Benton E. Gup focuses on money and payments in the United States and attempts to address historically what defines money, and how it becomes a form of accepted payment, in the paper titled "What is Money? From Commodities to Virtual Currencies/Bitcoin".