On the performance of network science metrics as long-term investment strategies in stock markets

This is the author accepted manuscript. The final version is available from Springer Verlag via the DOI in this recordInternational Conference on Complex Networks and their Applications - COMPLEX NETWORKS 2017: Complex Networks & Their Applications VIFirms and individuals have always searched for investment strategies that perform well and are robust to market variations. Over the years, many strategies have claimed to be effective but few resist the effect of time, that is, most of them become outdated. It turns out that markets have a “self-correcting ability”; the secretive/novel nature of strategies firms employ cannot win forever; other firms eventually implement competing strategies causing the market to adjust. Nowadays, most investment firms “sell” to their clients two approaches: high reward and low reward. Unfortunately the possibility of high reward is generally coupled with low robustness (volatility) and if one wants high robustness the yields are low (low reward). In this paper, we use an approach based on network characteristics extracted from historical market data. Network Science has argued that all complex systems have an underlying network structure that explains the behavior of the system. With this in mind, we propose a long-term investment strategy that builds a network from historical investment data, and considers the current state of this network to decide how to create portfolios. We argue that our approach performs better than standard long-term approaches

From Fragmentation to Function: Critical Concepts and Writings on Social Capital Markets' Structure, Operation, and Innovation

We hope to see a future in which more funds flow to investments seeking the generation of social and/or environmental value in conjunction with some level of financial performance. As the 'capital markets' moniker would suggest, we would like to see these capital flows be performance-based (so that funds advance the work of high-performance investees, while being less accessible to lower-performing and/or riskier ventures). Furthermore, we would like to see these investments adopt structures that more completely address the diverse needs and interests of investors and investees. Our ambition is that by better organizing the ideas and initiatives of the many individuals who have worked to frame this emerging market, these goals may be advanced. The paper's secondary goals are to help focus future research and praxis on efforts that build on the significant body of existing work without unduly re-treading well-worn analytical paths. This paper seeks to promote an elevated discussion of the social capital markets, a discourse focusing on  high-leverage issues. The paper also invites experts from related academic and practical fields to engage in a conversation that has to this point largely been conducted between social sector professionals turning their attention to capital flows and finance professionals placing their expertise in the service of social purposes

Global Human Resource Metrics

[Excerpt] What is the logic underlying global human resources (HR) measurement in your organization? In your organization, do you measure the contribution of global HR programs to organizational performance? Do you know what is the most competitive employee mix, e.g., proportion of expatriates vs. local employees, for your business units? (How) do you measure the cost and value of the different types of international work performed by your employees? In the globalized economy, organizations increasingly derive value from human resources, or “talent” as we shall also use the term here (Boudreau, Ramstad & Dowling, in press). The strategic importance of the workforce makes decisions about talent critical to organizational success. Informed decisions about talent require a strategic approach to measurement. However, measures alone are not sufficient, for measures without logic can create information overload, and decision quality rests in substantial part on the quality of measurements. An important element of enhanced global competitiveness is a measurement model for talent that articulates the connections between people and success, as well as the context and boundary conditions that affect those connections. This chapter will propose a framework within which existing and potential global HR measures can be organized and understood. The framework reflects the premise that measures exist to support and enhance decisions, and that strategic decisions require a logical connection between decisions about resources, such as talent, and the key organizational outcomes affected by those decisions. Such a framework may provide a useful mental model for both designers and users of HR measures

The market for socially responsible investing : a review of the developments

This contribution explains how socially responsible investing (SRI) has evolved in the last few decades and sheds light on its latest developments. It describes different forms of SRI in the financial markets; and deliberates on the rationale for the utilization of positive and negative screenings of listed businesses and public organizations. A comprehensive literature review suggests that the providers of financial capital are increasingly allocating funds toward positive impact and sustainable investments. Therefore, this descriptive paper provides a factual summary of the proliferation of SRI products in financial markets. Afterwards it presents the opportunities and challenges facing the stakeholders of SRI. This research presents a historic overview on the growth of SRI products in the financial services industry. It clarifies that the market for responsible investing has recently led to an increase in a number of stakeholders, including; contractors, non governmental organizations (NGOs) and research firms who are involved in the scrutinization of the businesses’ environmental, social and governance (ESG) behaviors. This discursive contribution raises awareness on the screenings of positive impact and sustainable investments. The researcher contends that today’s socially responsible investors are increasingly analyzing the businesses’ non-financial performance, including their ESG credentials. In conclusion this paper puts forward future research avenues in this promising field of study.peer-reviewe

Situating the Next Generation of Impact Measurement and Evaluation for Impact Investing

In taking stock of the landscape, this paper promotes a convergence of methods, building from both the impact investment and evaluation fields.The commitment of impact investors to strengthen the process of generating evidence for their social returns alongside the evidence for financial returns is a veritable game changer. But social change is a complex business and good intentions do not necessarily translate into verifiable impact.As the public sector, bilaterals, and multilaterals increasingly partner with impact investors in achieving collective impact goals, the need for strong evidence about impact becomes even more compelling. The time has come to develop new mindsets and approaches that can be widely shared and employed in ways that will advance the frontier for impact measurement and evaluation of impact investing. Each of the menu options presented in this paper can contribute to building evidence about impact. The next generation of measurement will be stronger if the full range of options comes into play and the more evaluative approaches become commonplace as means for developing evidence and testing assumptions about the processes of change from a stakeholder perspective– with a view toward context and systems.Creating and sharing evidence about impact is a key lever for contributing to greater impact, demonstrating additionality, and for building confidence among potential investors, partners and observers in this emergent industry on its path to maturation. Further, the range of measurement options offers opportunities to choose appropriate approaches that will allow data to contribute to impact management– to improve on the business model of ventures and to improve services and systems that improve conditions for people and households living in poverty.

From Ideas to Practice, Pilots to Strategy: Practical Solutions and Actionable Insights on How to Do Impact Investing

This report is the second publication in the World Economic Forum's Mainstreaming Impact Investing Initiative. The report takes a deeper look at why and how asset owners began to include impact investing in their portfolios and continue to do so today, and how they overcame operational and cultural constraints affecting capital flow. Given that impact investing expertise is spread among dozens if not hundreds of practitioners and academics, the report is a curation of some -- but certainly not all -- of those leading voices. The 15 articles are meant to provide investors, intermediaries and policy-makers with actionable insights on how to incorporate impact investing into their work.The report's goals are to show how mainstream investors and intermediaries have overcome the challenges in the impact investment sector, and to democratize the insights and expertise for anyone and everyone interested in the field. Divided into four main sections, the report contains lessons learned from practitioner's experience, and showcases best practices, organizational structures and innovative instruments that asset owners, asset managers, financial institutions and impact investors have successfully implemented

E-finance-lab at the House of Finance : about us

The financial services industry is believed to be on the verge of a dramatic [r]evolution. A substantial redesign of its value chains aimed at reducing costs, providing more efficient and flexible services and enabling new products and revenue streams is imminent. But there seems to be no clear migration path nor goal which can cast light on the question where the finance industry and its various players will be and should be in a decade from now. The mission of the E-Finance Lab is the development and application of research methodologies in the financial industry that promote and assess how business strategies and structures are shared and supported by strategies and structures of information systems. Important challenges include the design of smart production infrastructures, the development and evaluation of advantageous sourcing strategies and smart selling concepts to enable new revenue streams for financial service providers in the future. Overall, our goal is to contribute methods and views to the realignment of the E-Finance value chain. ..