One of the most important recent developments in financial markets is the institutionalization of saving associated with the growth of pension funds, life insurance companies, and mutual funds. An increasing proportion of household saving is now managed by professional portfolio managers instead of being directly invested in the securities markets or held in the form of bank deposits. With the aging of the population and its adverse impact on public pension systems, the shift of individual savings to institutional investors is likely to become even more marked in the coming years. This book provides a comprehensive economic assessment of institutional investment. It charts the development and performance of the asset management industry and analyzes the implications of rising institutionalized saving for the development of the securities trading industry, the financial sector as a whole, and the wider economy. The book draws extensively on international experience, particularly in the United States, Western Europe, and Japan.

The evidence-based approach to a more worthwhile portfolio The Index Revolution argues that active investing is a loser's game, and that a passive approach is more profitable in today's market. By adjusting your portfolio asset weights to match a performance index, you consistently earn higher rates of returns and come out on top in the long run. This book explains why, and describes how individual investors can take advantage of indexing to make their portfolio stronger and more profitable. By indexing investment operations at a very low cost, and trusting that active professionals have set securities prices as correctly as possible, you will achieve better long-term results than those who look down on passive approaches while following outdated advice that no longer works. "Beating the market" is much harder than it used to be, and investors who continue to approach the market with that mindset populate the rolls of market losers time and time again. This book explains why indexing is the preferred approach in the current investment climate, and destroys the popular perception of passive investing as a weak market strategy. Structure your portfolio to perform better over the long term Trust in the pricing and earn higher rates of return Learn why a passive approach is more consistent and worthwhile Ignore overblown, outdated advice that is doomed to disappoint All great investors share a common secret to success: rational decision-making based on objective information. The Index Revolution shows you a more rational approach to the market for a more profitable portfolio.

This survey examines the vibrant academic literature on environmental, social, and governance (ESG) investing. While there is no consensus on the exact list of ESG issues, responsible investors increasingly assess stocks in their portfolios based on nonfinancial data on environmental impact (e.g., carbon emissions), social impact (e.g., employee satisfaction), and governance attributes (e.g., board structure). The objective is to reduce exposure to investments that pose greater ESG risks or to influence companies to become more sustainable. One active area of research at present involves assessing portfolio risk exposure to climate change. This literature review focuses on institutional investors, which have grown in importance such that they have now become the largest holders of shares in public companies globally. Historically, institutional investors tended to concentrate their ESG efforts mostly on corporate governance (the “G” in ESG). These efforts included seeking to eliminate provisions that restrict shareholder rights and enhance managerial power, such as staggered boards, supermajority rules, golden parachutes, and poison pills. Highlights from this section: · There is no consensus on the exact list of ESG issues and their materiality. · The ESG issue that gets the most attention from institutional investors is climate change, in particular their portfolio companies’ exposure to carbon risk and “stranded assets.” · Investors should be positioning themselves for increased regulation, with the regulatory agenda being more ambitious in the European Union than in the United States. Readers might come away from this survey skeptical about the potential for ESG investing to affect positive change. I prefer to characterize the current state of the literature as having a “healthy dose of skepticism,” with much more remaining to be explored. Here, I hope the reader comes away with a call to action. For the industry practitioner, I believe that the investment industry should strive to achieve positive societal goals. CFA Institute provides an exemplary case in its Future of Finance series (www.cfainstitute.org/research/future-finance). For the academic community, I suggest we ramp up research aimed at tackling some of the open questions around the pressing societal goals of ESG investing. I am optimistic that practitioners and academics will identify meaningful ways to better harness the power of global financial markets for addressing the pressing ESG issues facing our society.

Examines the law and policy of financial regulation using a combination of conceptual analysis and strong empirical research.

Praise for TREYNOR ON INSTITUTIONAL INVESTING "Jack Treynor has a mind of his own. I mean that as the highest compliment. Jack Treynor sees what no one else sees, thinks what no one else thinks, explains what no one else explains. You will learn more in fifteen minutes with Jack Treynor than in a full hour with most pundits. You will work hard but you will see things, think things, and understand things as never before. This book is a most valuable treasure, gleaming with Jack Treynor's brilliance." -Peter L. Bernstein, author, Capital Ideas Evolving "Vintage Treynor. This is a must-own reference for anyone involved in institutional asset management. It assembles - in one place - many of the important insights of one of the most provocative and creative players in the finance world over the past half-century." -Robert D. Arnott, Chairman, Research Affiliates, and Former Editor, Financial Analysts Journal "As a practicing investment manager, Treynor always preferred brilliance to soundness. Identifying the flaws in conventional thinking, he shows both the theorist and the practitioner where to invest time in their search for excess return." -Perry Mehrling, Professor of Economics, Barnard College, Columbia University, author, Fischer Black and the Revolutionary Idea of Finance "Jack Treynor's new book brings together a lifetime of exploring the important questions surrounding the sophisticated investor's task. Readers of Treynor on Institutional Investing will be richly rewarded by the insights the author has developed about both the practical and the conceptual keys to successful investing." -Samuel L. Hayes, III, Jacob Schiff Professor of Investment Banking Emeritus, Harvard Business School