CFA Society Chicago NewsBrief
Apr. 15, 2014

Chicago's 1871 reps to White House: Let startups crowdfund
Crain's Chicago Business
Founders of five startup companies from 1871, Chicago's high-tech incubator space, will make a plea for regulations allowing Web-based appeals to investors when they meet with Obama administration officials in Washington at a White House “summit” on entrepreneurship. “We've been waiting for more than a year to get the regulations done for Jobs Act crowdfunding,” 1871 CEO Howard Tullman said. “If they ask us for our opinion, that's a huge help for entrepreneurship.”More

A Board is only as strong as their structure and focus
CFA Chicago
Seventy-five percent of the 1,000 largest USA companies do not have the management structure, performance metrics and long-term incentives for balanced growth, innovation and long-term value creation for shareholders. The short-term and mostly compliance focus of many boards is a barrier to creating future value. It is time to rethink the strategic planning horizon, operational performance metrics and longest accountable performance period for named officers (most companies have a three-year or less incentive plan). Keynote speaker Tim Koller is coming to The Standard Club on April 24 at 3 p.m. to discuss the roles and expectations of boards and C-suite executives.More

The ever-evolving investment landscape
CFA Chicago
Many frameworks and finance models were created in an environment that shaped our collective experience over the last 30-50 years. Recently many dynamics in the investment landscape have changed: geopolitical instability, an expanded role of governments in capital markets, and correlations between previously believed unrelated securities has become a challenging reality. Along with those facets of the investment landscape, the industry is now adapting to the effects of high-frequency trading. On Thursday, May 1, join CFA Chicago at The University Club to discover how recent changes in the global investment landscape should shape your strategic and tactical investment decisions.More

The 2014 economy: Is this the Year of the Horse?
CFA Chicago
Join CFA Chicago on Tuesday, April 29 from 12 - 1 p.m. for the Distinguished Speaker Series featuring David Rosenberg, Chief Economist and Strategist for Gluskin Sheff and Associates. Fees for members are $45 dollars, the student-members fee is $10, and non-members are welcome to join for $55. This series also qualifies for credit under the guidelines for the CFA Institute Professional Development Program. For those that can't attend in person, CFA is offering a webcast. The webcast is free for CFA Chicago members, CFA Chicago student members, all other CFA society members, and is available for a $40 fee to non-members.More

How technology can help you commit fewer investment mistakes
CFA Institute's Enterprising Investor
It may seem as if the admonitions and lessons of behavioral finance are difficult to recognize, let alone correct. But as Clare Flynn Levy, founder and CEO of Essentia Analytics, has learned, technology can help you avoid many of the investment mistakes that result from behavioral biases. While the idea is simple, the implications are far-reaching: The firm’s software analyzes historical trade data and identifies behavioral patterns that show managers where their skills lie and where they’re getting in their own way. More

Trillion-dollar firms dominating bonds prompting probes
Bloomberg
Bill Gross and Larry Fink manage a $3 trillion pile of bonds — an amount almost as big as Germany’s economy. Their firms, Pacific Investment Management Co. and BlackRock Inc. (BLK), doubled holdings since 2008, outpacing the market’s growth of 50 percent. Some of the largest hedge-fund firms, including Bridgewater Associates LP and BlueCrest Capital Management LLP, have also more than doubled their investments in debt, data compiled by Bloomberg show. At the same time, Wall Street banks are shrinking their stakes in bonds, Federal Reserve data show.More

UBS chairman Weber sees leverage-ratio rules tightening more
Bloomberg Businessweek
Swiss and international regulators will probably ask banks to hold more capital in relation to total assets after the U.S. raised leverage-ratio requirements for the biggest lenders, UBS AG (UBSN) Chairman Axel Weber said. “I do expect that to become kind of the new norm for all the global banks,” Weber said in an interview on Fox News’ “Sunday Morning Futures” program, referring to stricter caps on leverage approved by U.S. regulators this month.More

Goldman dodges a shareholder battle that dogs rivals
Reuters via Chicago Tribune
When Goldman Sachs Group Inc filed its shareholder proxy earlier this month, it was free of a proposal that has become increasingly popular among corporate governance activists: a demand for more disclosure about lobbying. Goldman's big Wall Street rivals can't say the same. JPMorgan Chase & Co, Bank of America Corp, Citigroup Inc and Morgan Stanley all face lobbying-disclosure proposals this year.More

Strong start for CBOE short-term volatility index options
HedgeWeek
First-day trading volume for CBOE Short-Term Volatility Index options with weekly expirations totalled an estimated 3,134 contracts, according to data released by the Chicago Board Options Exchange. “We were pleased to see a very active opening day of trading in Short-Term VIX options, with strong volume and broad market participation,” says CBOE Holdings CEO Edward T Tilly. “Short-Term VIX options bring a new dimension for volatility trading to the market, and it is clear from today’s activity that market participants see tremendous utility for the contract.” More

Illinois moves to ease Chicago pension woes
The New York Times
The Illinois legislature on approved a plan to start easing Chicago’s crippling pension problems by requiring some city workers to pay more for their retirement benefits and by granting smaller increases in those benefits. The move is part of an effort put forth by Mayor Rahm Emanuel to shore up the pension system and presumably would include a proposed property tax increase for Chicago residents, a tax subject to City Council approval.More

CME sued on claims high-frequency traders bought access
Bloomberg
CME Group Inc., owner of the world’s largest futures market, was sued by three of its users who alleged the company sold access to order information to high-frequency traders ahead of other market participants.More

SEC forms squad to examine private funds
Chicago Tribune
The U.S. Securities and Exchange Commission has put together a dedicated group to examine private equity and hedge funds, after the 2010 Dodd-Frank law required the funds to be regulated, according to people familiar with the matter.More

Illinois private equity deals fall in 2013
Chicago Tribune
Private equity deals in Illinois dropped in number and value in 2013 as competition and high prices challenged buyout firms. Illinois' 100 transactions totaled $16.9 billion and were down more than 30 percent from the previous year, said PitchBook Data Inc.More

6 traits of successful ETF investors
Seeking Alpha
Millions of investors have successfully integrated ETFs into their portfolios over the last two decades as these innovative vehicles have surpassed more than $1.6 trillion in global assets. They are used by both retail and institutional accounts as a method of gaining instant exposure to a specific asset class with the click of a button. Through his conversations with clients, readers, and industry peers, David Fabian has recognized several common traits that prosperous ETF investors share.More