Ifactor course7/11/2023 ![]() ![]() Take a portion of it that you can just convert into a bunch of rules, and just turn that into an index or a systematic set of rules. So what he means by the term indexation is that you take that portion of the value that an active manager brings. What it does is what some people like Craig Lazzara from S&P called the indexation of a portion of active management. What is really interesting is this new emergence of this third way, it's not active or passive. Active management tends to be expensive, tends to be inconsistent, but hey, if it works, you can do better than the passive index. On the other hand, we had active management where a manager who had skill that she or he would bring to the table would be able to somehow use the skill to outperform the index, and that's why you would give your money to this manager. Just put your money in the index and forget about it. Passive is put your money in the index S&P 500, 100, doesn't matter. The traditional choice was a choice between what they call active and passive. To understand factor investing and smart beta a little better, you have to think back to how we traditionally used to think about investment choices that you and I had. That is this trend towards factor investing or what some people called smart beta. Well, welcome back and we are going to start by discussing what I think is one of the most exciting changes that have happened in investment management in the last decade at least. If you follow along and implement all the lab exercises, you will complete the course with a powerful toolkit that you will be able to use to perform your own analysis and build your own implementations and perhaps even use your newly acquired knowledge to improve on current methods. By the time you are done, not only will you have a foundational understanding of modern computational methods in investment management, you'll have practical mastery in the implementation of those methods. In this course, we cover the estimation, of risk and return parameters for meaningful portfolio decisions, and also introduce a variety of state-of-the-art portfolio construction techniques that have proven popular in investment management and portfolio construction due to their enhanced robustness.Īs we cover the theory and math in lecture videos, we'll also implement the concepts in Python, and you'll be able to code along with us so that you have a deep and practical understanding of how those methods work. Instead of merely explaining the science, we help you build on that foundation in a practical manner, with an emphasis on the hands-on implementation of those ideas in the Python programming language. The practice of investment management has been transformed in recent years by computational methods.
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