Category Archives: Finance & Insurance

Whether we view it as an instrument or driver of our economy, the financial system reflects the world’s state of health. Understanding how it works, its complexity but also its vulnerability and the risks it generates helps political decision-makers and key players in the system to anticipate better and plan for the future more effectively.

How much of a risk are we taking with smart homes?

The IssueHow do smart technologies create or alter risks in the home

Smart homes may sound exciting with new technologies enabling devices that can cover everything from automated climate and lighting to virtual assistants, fridges that restock themselves and access controlled remotely via an app. But smart homes may also create new risks alongside the benefits they bring.

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Small numbers, larger mistakes: How number bias affects investor information

Advice and information provided by stock analysts, such as target prices and recommendations, have a powerful influence on investor decisions. However, new research shows that the way the human mind processes numbers means that analyst forecasts are frequently inaccurate when compared with eventual outcomes.

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The effect of screening for environmental, social and governance performance on passive and smart beta investing strategies

Using environmental, social, and governance (ESG) scores of firms belonging to the MSCI World universe, we measure the impact of score-based exclusion on both passive investment and smart beta strategies. We find that exclusion leads to improved scores of otherwise standard portfolios without deterioration of their risk-adjusted performance. Smart beta strategies exhibit a similar pattern, often in a more pronounced way. Moreover, our results demonstrate that exclusion also implies regional and sectoral tilts as well as (possibly undesirable) risk exposures of the portfolios.

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