Research: When CEOs Don’t Win Awards, They Make More Acquisitions

Each year major business media outlets rank CEOs based on their performance. The few who win awards and earn the highest ranking become superstar CEOs — they gain visibility and higher social recognition, and they may even earn higher compensation. Award-winning CEOs also tend to capitalize on their fame by assuming more board seats and writing books. But for every happy award-winning CEO, there are many more CEOs who did not win. We wanted to know how these rankings affect CEOs who don’t get the top spot. If awards can influence the behaviors of CEOs who win, could they also influence the … Continue reading Research: When CEOs Don’t Win Awards, They Make More Acquisitions

Diversification in Multi-Factor Portfolios

The debate rages on over the application of valuation in factor-timing methods. Regardless, diversification remains a prudent recommendation. How to diversify multi-factor portfolios, however, remains up for debate. The ActiveBeta team at Goldman Sachs finds new evidence that composite diversification approaches can offer a higher information ratio than integrated approaches due to interaction effects at low-to-moderate factor concentration levels. At high levels, they find that integrated approaches have higher information ratios due to high levels of idiosyncratic risks in composite approaches. We return to old research and explore empirical evidence in FTSE Russell’s tilt-tilt approach to building an integrated multi-factor … Continue reading Diversification in Multi-Factor Portfolios