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Best Blogs of the Week #266

Two posts covering a range of topics, including the recent US equity slumber.

BlackRock The seesaw relationship of volatility and momentum stocks – The relationship between volatility and momentum has actually strengthened in recent years. Since the end of the financial crisis and the advent of the current period of extraordinary monetary accommodation, the relationship has become much stronger

William Blair – E and S Themes Drive ESG Growth – McKinsey estimates that 1.6 billion people out of 2 billion without bank accounts—more than half of whom are women— could be assimilated into the system via digital finance.

slumber

 

Best Blogs of the Week #265

Two excellent posts this week that utilize data to support arguments frequently discussed and investigated. Russell does an excellent job simplifying (perhaps too simple?) an advisor’s value to an investor. Personally, I enjoyed the investor behavior component greatly (chart below).

Russell 2017 Value of a fiduciary advisor: more than 4% – Instead, the technical and emotional guidance that only a trusted, human advisor (as opposed to robo-advisors, for instance) can offer to investors who are attempting to undertake the complex job of coordinating the accumulation, distribution and transfer of their wealth, is invaluable – particularly in an environment that is likely to deliver lower returns and higher volatility than investors have grown accustomed to recently.

SSgA – Look Beyond the Label: The Importance of How a Smart Beta Index is Weighted – As these examples demonstrate, understanding underlying index construction is crucial to achieving desired investment results when choosing a smart beta ETF.

value

Best Blogs of the Week #264

Well two days into the tournament and my high active share bracket is busted (I took the orthogonal to market strategy of going with Seton Hall through two rounds.). Anyhow, two posts this week.

Russell Multi-asset investing: the importance of seeking to manage the downside – … if a client’s portfolio suffers a -30% drop in value, a 43% rise will be needed to get the portfolio back to its starting point. That’s where a multi-asset approach that also emphasizes managing downside risk is so valuable, even if they don’t protect against all losses or guarantee a profit.

WisdomTree – Reflections on the Global Macro Environment – … thinks the Fed is way behind the curve in hiking interest rates and is likely to do three to four hikes in 2017.

Wildcats

March Madness 2017

Many of you are thinking about brackets and who to place in the Final Four this year. It’s a big year for Mike (and seemingly 50% of the ESPN television personalities) as his Wildcats are in the Big Dance for the first time. Ever.

(Needless to say, Northwestern getting in was properly celebrated:

– Mike)

So for what it’s worth (i.e., literally zero), here are Final Four picks:

East Midwest South West
Anu  Villanova Oregon UCLA Arizona
Mike  Wisconsin  Michigan Butler  Gonzaga

Plus two thoughts from me:

  • Always take Mike’s picks over mine. In any sport.
  • I’m putting the Shockers and Mustangs through to the Sweet Sixteen.

And Mike:

  • Nobody will remember my picks when it’s said and done so I’m going with selections that will (a) make me happy and (b) not be viewed as too insane.
  • I’ve seen Duke, Kentucky, North Carolina, and a number of other schools win enough already. Let’s all root for underdogs!

(photo courtesy of The Daily Northwestern)

Homepage

Site Banners: To Rotate or Not to Rotate?

We’re working with a client to develop a plan to revitalize their Web sites. In a discussion focused on homepages, a specific topic came up: banners. More specifically, there was a straightforward question: what’s better, static or rotating homepage banners?

JH Banner

It’s a tactical question but an important one given the importance of engaging users via the homepage experience. And while many have personal opinions, let’s start with a simple analysis.

What Does the Industry Do?

First off, almost every firm presents some type of banner, though there are a few exceptions. So I examined the homepages of 20 firms’ advisor sites. Here’s what I saw:

Banner Data

By roughly a 2:1 margin, firms utilize rotating banners. The rotating banners vary in terms of execution; static banners do as well, with approaches roughly evenly split between promoting product and highlighting thought leadership.

Does it Matter?

The effectiveness of any banner depends upon numerous factors – size, visual design, specific text – so there’s no absolute clarity on if a static or rotating approach is categorically better. That said, I think there are two issues that tip the scales toward static presentation:

  • The Data: if you review all the studies done on the success rates (i.e., clicks, conversions) associated with static v. rotating banners, you’ll get a somewhat mixed picture but one that I’d argue slightly favors static. That, plus the fact that 2nd/3rd/4th panels in a rotating banner generate poor response rates, supports a static approach.
  • Usability: rotating banners bring some baggage relative to their static counterparts. The motion is distracting; auto-rotation lessens users’ control of the site experience; and timing the rotation can be a tricky proposition (i.e., too fast and users can’t fully digest the message, too slow and they won’t wait for the next message to appear).

Still, this is far from a clear-cut issue or one that is specific to asset management. The same variation in banner delivery is seen in the pharma industry, for example, where the top 10 firms’ sites are evenly split on static v. rotating banners. So while I expect firms will continue to execute differently, it will be interesting to see if a stronger consensus (or an entirely new approach) develops.