Risk Weighting: An intuitive approach to diversification – Nasdaq – 1.17.19

Summary:

Now On Demand.

Market-cap-weighted benchmarks may represent the market, but do they provide the best approach to gain diverse exposure to the equity markets? For the last 20 years, passive index funds have gained a lot of popularity with investors, which is understandable since they offer investors a low cost, seamless way to invest in a broad basket of stocks. However, it’s time we acknowledge that there may be severe limitations to cap-weighted solutions.

Join us to discuss:

• How market-cap weighted solutions might lull investors into a false sense of security by overestimating the true diversification benefits
• How a few mega-caps have driven recent performance of market-cap weighted indexes
• How risk weighting seeks to equalize risk contribution in an index

Speakers:

Scott Kefer is a senior portfolio specialist for VictoryShares and utilizes his 24 years of active management expertise to focus on the continued growth of the firm’s rules-based and custom investment solutions. He supports the firm’s sales efforts by providing strategic beta insights and education to professional investors and clients. In addition to his role with VictoryShares, Mr. Kefer is a senior portfolio manager for NewBridge Asset Management, a Victory Capital investment franchise, and a member of the NewBridge Large Cap Growth portfolio management team.

He joined Victory Capital in 1999 with six years of prior investment experience. Previously, he held a similar position in the Campbell, Cowperthwait division of U.S Trust Company.

Mr. Kefer holds a Bachelor of Science in business management from Skidmore College and is a CFA charterholder.

Cameron Lilja is the Director of Product Development for Nasdaq Global Information Services. He is responsible for the development of innovative, market-leading indexes, including the research and content generation necessary to support a successful index launch. He has been a featured speaker and panelist at industry events, discussing topics from smart beta to stock buybacks. Cameron previously served as a Senior Analyst for Nasdaq’s Economic and Statistical Research team where he had the opportunity to advise all Nasdaq business lines while working on initiatives in the U.S. and Europe to improve market structure, encourage capital formation, and enhance trading efficiency.

Prior to joining Nasdaq, Cameron worked as a research analyst at Economists Incorporated and RBB Economics. He earned his Bachelor of Science in Mathematics with a minor in Economics from Dickinson College.