Smart Beta Rotation Can Provide Alpha

While research has generally supported that systematic momentum and value tilts applied to multifactor portfolios can generate excess risk-adjusted returns, the benefits do not come without the potential introduction of significant tracking error.

With the expectation that we will see more factor rotation strategies in the market in 2017, we think it is important to evaluate the magnitude of this potential trade-off.

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Updating Investor Targeting to Capitalize On New Market Trends

Direct investor targeting has always been an essential part of a successful investor relations program. Updating your institutional investor target list each year is great way for companies to capitalize on changing market trends, economic developments, and keeps your prospects list from going stale. StarHub is an fine example of a firm that refreshes its IR institutional target list each year based on the latest company developments and investor preferences. Read more on StarHub's dynamic IR investor targeting program and how your firm might benefit from an annual institutional investor target list refresh at IR Magazine.

Positive Investor Sentiment Has Stabilized; Awaiting The Next Catalyst

As 2016 wraps up with a new President-elect and an interest rate hike with likely more to come, how are investors thinking about and positioning within the Technology sector? 

Corbin Perception's final Tech Sentiment Survey of 2016 finds sentiment remains generally positive as investors recharge and await the next catalyst. While global capex concerns linger, respondents largely expect most key metrics to stay the same or improve and are casting a cautiously optimistic eye toward future tax reform. Still, bulls won't be fully charged until the Tech IPO market recovers, largely expected in 1H17.

Their survey identified some interesting investment themes, including predicted winners and losers among bellwethers.

While investors anticipate a glitch in Tech valuations amid an anticipated President-elect Trump reboot of global trade agreements, the U.S. economic outlook is neutral and outright optimistic for equity markets. 

Read the report

How to rebuild shareholder confidence following challenging times

"There couldn’t be a better time to increase access to management than during and after a challenging period'.

The investor landscape presents many opportunities for demanding times, which can negatively affect shareholder confidence. Not only are companies vulnerable to general market challenges – including regulation, commodity pricing and political implications – but company-specific threats, such as ESG issues, shareholder activism and employee negligence can also all have a detrimental effect on market perception.

IROs can play a vital role in rebuilding shareholder confidence following difficult periods, with one key tactic being to facilitate greater access to management….

Key Factors that Drive ETF Investor Decisions

The fourth-annual ETF investor survey comes at an interesting time for the ETF industry. This year has seen a healthy number of launches and a record number of ETF closures, while total assets continue to grow. has again polled their sophisticated readership to learn their opinions on the leading issues faced by ETF investors today.

And once again has partnered with Brown Brothers Harriman—a leading provider of asset-servicing for the global ETF market, with $340 billion in ETF assets under custody as of June 30, 2016—to update the survey to reflect the most relevant core topics and emerging new concerns, arriving at a comprehensive questionnaire of more than 35 questions.

They’ve gathered the results, and the following is a summary of the findings.

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Can Paid-For Micro-Cap Research Have Value for Investors? OTC Markets is Betting It Does

It’s hard out here for a small cap. Despite being the primary driver of job growth in this country, Wall Street’s smallest firms have the most trouble getting the public markets to work for them. Aside from the tremendous costs associated with being a public company, small- and microcap companies have to further deal with an increasing lack of attention. Despite offering the biggest potential returns, smaller companies tend to be shunned by large and small investors alike because of the perception that small- and micro-cap stocks are too risky.

At the core of this issue is a lack of information. Sure, smaller companies generally carry more risk for investors and display more volatility, but they more than balance that out with the potential for much larger returns than exist in larger, more established companies. When part of a balanced, diversified portfolio, they can be invaluable. But they also lack the sort of prolific and detailed research reports that are usually readily available for larger public companies. Even for investors interested in taking on a little more risk in search of big returns, doing so without having access to the sort of expert opinions and research analysis they’re accustomed to is a non-starter.

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Should you pre-record your earnings call?

Although it is still something of a rarity, some companies today release pre-recorded earnings calls. Traditionally, management reads out scripted comments live before diving into the Q&A. But with pre-recordings, the scripted comments are taped in advance. They can be released immediately before the Q&A or further in advance. Some companies even do away with the live Q&A and simply post pre-recorded comments.

Franklin Templeton Investments, for example, provides its pre-recorded comments via dial-in replay and audio webcast at the same time its earnings press release is filed. It then follows that up with a live Q&A call two-and-a half hours later. Other firms that utilize pre-recorded earnings comments include Walmart and Sears Holdings. Below we outline some of the pros and cons to help you decide if it is right for your IR program.

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The 4 Multimedia Horseman of IR

IR Magazine recently published a Global Investor Relations Study on the use of multimedia in IR communications. The research focuses on the four main multimedia formats used in IR communications: audio webcasts, video webcasts, corporate video and infographics. The results of survey questions answered by 797 respondents analyzes the findings globally, by region and market cap.

Key findings:

-Audio webcasts are the most used and considered the most useful multimedia format for IR.

-Corporate video and infographics have seen the greatest growth in use over the past three years.

-Webcasts are primarily used for results presentations. Use of corporate video and infographics is more varied, including corporate publishing, presentations and investor events.

-IR practitioners see video as a way of personalizing the company for investors and bringing the company’s operations to life.

-Almost a third of IR practitioners have received feedback from investors about their use of multimedia.

Read the full report here.


Best Practices for IR Following an Earnings Call

Ipreo’s “Hot Topics” publication delivers relevant information directly from the investment community regarding trends impacting the IR industry.  As many of our clients have inquired about best practices for interacting with investment managers following an Earnings Call, for our June edition of Hot Topics we interviewed and surveyed investors managing over $2.43 Trillion in equity assets on this exciting topic.

We found that the majority of investors mentioned that they prefer to touch base with IR themselves after the call.  However, it is important to note that many investment managers mentioned that a proactive IR team cannot hurt, especially surrounding an abnormal event. 

Investor feedback on best practices for IR following an Earnings Call:

  • “If IR reached out to me that would be great. One thing I find helpful and effective is pre-arranged CFO call backs following earnings calls. Thirty minutes is all that’s needed.”

  • “I prefer a more proactive practice. I follow around 100 companies so it can be difficult to follow up with everyone.”

  • “I’d rather just be able to reach out to the IR team on my own.”

  • “I do not see the need for them calling me unless it is an invitation to an event or something similar.”

  • “I don’t feel IR has to reach out individually after every earnings report. However, when something unusual happens, I would appreciate a call from IR.”

  • “Following an earnings call, I prefer IR teams to reach out proactively, I think that’s great."

The full report can be found here.

OTC Markets Tells SEC: Extend Eligibility of Reg A+ to All Smaller Reporting Companies

OTC Markets (OTCQX: OTCM) has filed a petition with the Securities and Exchange Commission requesting the SEC to extend amendments under Reg A+ to a far wider range of SEC reporting companies.

R. Cromwell Coulson, CEO of OTC Markets, explained that Reg A+ securities offerings are perfect for smaller companies.  Yet the SEC missed an opportunity to improve access to capital and support small company growth.  Coulson believes expanding issuer eligibilityto all smaller reporting companies is win for the economy as well as a boost for SMEs.

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Digital IR: 2016 best practices

IR Magazine, sponsored by NASDAQ, recently conducted an extensive global survey on how the IR community is using social media, IR websites, webcasting and corporate video to communicate with investors. The white paper titled, Digital IR: 2016 Best practices provides important insights and the latest global trends to fine-tune your company’s IR program.

Click here to view or download

Is Your Smart Beta Risk-Efficient?

The challenges facing investment advisors seem to get more complex every day: volatile markets; an uncertain political environment; and an unending array of new investment approaches to understand. In the past, it seemed there were two "schools of thought": 1) since markets are efficient, use low-cost, cap-weighted passive; or 2) find managers to beat the market and manage risk. Today we see an incredible proliferation of choices in "the space between" passive and active strategies.

Within the growing universe of noncap-weighted ETFs—alternatively called smart beta, or factor-based investing—there are strategies targeting single-risk factor exposure (e.g., value, momentum), others employing alternative weighting methods (e.g., fundamental-weighted, dividend-weighted) and a smaller, but expanding, set of multifactor strategies coming to market.


IR advice from a shareholder activist

A conversation with Greg Taxin, Luma Asset Management.

In these segments of the video series ‘ON Message with Neil Stewart’, produced by Bloomberg and IR Magazine, Taxin dispenses tips for CEO’s and IROs who want to learn how to work with the new generation of constructive activists, not necessarily fight them.

See the interview here.

3 Takeaways From iShares’ Gold ETF Hiccup

Some exchange-traded fund investors out there are likely scratching their heads about gold.

The market’s largest gold ETFs were thrust into the spotlight on Friday afterBlackRock (BLK) announced, just before the stock market opened, that it would no longer accept new share creations for its $7.6 billion iShares Gold Trust (IAU).

Throwing a wrench into normal ETF mechanics, as BlackRock did, can be problematic when an ETF’s supply/demand balance falls out of equilibrium. Normally, ETFs are supposed to trade in line with the value of their assets, in this case gold. When new shares are limited, an ETF’s price can jump to a “premium,” and then suddenly collapse, irrespective of price moves in the underlying asset.

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Earnings tweets becoming ‘more effective’, finds study

FTI Consulting report explores effectiveness of social media disclosures

Though fewer companies are sharing earnings news via social media, those that do are finding their disclosures more popular and effective, according to a new report from FTI Consulting.

FTI recorded 504 earnings result tweets in 2015, down slightly from 521 last year, but suggests such disclosures are ‘almost twice as popular and effective’ after recording 3,160 retweets and likes across all companies, up from 1,766 in 2014.

Click here for the full report.

CEO Insights For a Successful Institutional Investor Meeting

Ipreo recently polled leading Buyside analysts about their research & new idea generation process.  Below is a link to the findings from some of the largest firms in the investment business, including Black Rock, Fidelity Investments, and J.P. Morgan.

Is your company IR doing the best it can to reach these Buyside firms and analysts?  Click here for CEO insights and be prepared for a successful institutional investor meeting.  

Ipreo Special Report: Buy-Side Research Process

Five years of research: how has IR changed?

How much has the investor relations role changed since 2011? We have tried to answer this question as part of this year’s Global Investor Relations Practice Report, which examines exactly how IROs around the world practice their profession.

Included in the 2015 edition is a section that examines some of the headline figures – team size, budget, number of investor meetings and the like – from the past five years of IR Magazine’s research, which makes for interesting reading. 

Continued at IR Magazine. 

Blueprint for a Successful Earnings Call

The quarterly earnings call is one of the most powerful means a public company has within its control to broadly and clearly disseminate essential information to the financial community. Four times a year, management has the ability to demonstrate execution against its communicated plan, reinforce strategy and set expectations. And in the event operating performance falls short of expectations, the call, when executed well, serves as an ideal platform to address key issues and begin to rebuild credibility.

In this report, we cover all aspects of the earnings process – from preparation to execution and followthrough, and include both best and worst practices based on investor and IRO experiential perspectives. Our research identifies several opportunities for companies to refine and improve the way they conduct their earnings calls, serving to differentiate the IR program and further capture investor and analyst mindshare.

Regulation A+: Now Everyone Can Invest In Your Startup

For the past 80 years only accredited investors, meaning individuals who make over $200,000 in income or who have $1 million in assets (excluding their primary residence), have been able to invest in startups in America. That has changed today with the implementation of Title IV of the JOBS Act which represents one of the biggest changes in the financial service industry. Additionally, this will likely have a positive impact on our economy as 65% of the net new jobs are created by small businesses, while 1 million jobsare cut each year by large corporations.

The team of startup investing marketplace, Onevest.

Regulation A+ is a newly revamped securities regulation that companies can rely on to raise up to $50 million from accredited and non-accredited investors alike. In traditional funding (Regulation D, Rule 506 (b) / (c) offerings) companies are either limited to having up to 35 non-accredited investors in their round or completely banned from onboarding non-accredited investors altogether. Accredited investors make up less than 1% of the US population, meaning 99% of people previously couldn’t invest in startups even if they understood the risk and had the liquid capital to deploy.

Regulation A has been around for years, but has not been widely used mainly because of the way the rules were written, making raising capital quite inefficient. In fact, the Securities and Exchange Commission (SEC) estimated only 26 offerings were conducted annually and they were capped at an upper funding limit of $5 million.  Whereas now, with Regulation A+, companies can raise up to $20 million on Tier 1 and up to $50 million on Tier 2, which changes the game.

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