Maybe "balpha" is the next evolution of the active vs. passive debate, and another hashtag to add to your Twitter
, senior vice president and chief investment officer of equities for Charles Schwab Investment Management
, shared that term on a panel this morning at the 2015 Investment Company Institute (ICI
) General Membership Meeting (GMM
). Balpha is his word for what is commonly called smart beta or strategic beta; the word combines "alpha" and "beta."
The term came up in the panel's discussion of the future of active and passive investments. Jenny Johnson
, executive vice president of operations and technology at Franklin Templeton
, moderated the panel, which added "Fresh Perspectives" to the 2015 ICI GMM's "Facing the Future" tagline. Others on the panel included: Kara Hoogenson
, managing director of product development at Principal Funds
; Simon Mendelson
, managing director and head of product management and development in the Americas for Deutsche Asset and Wealth Management
; and Julie St. John
, president and chief information officer for Capital Group's
investment operations and technology group.
The panel touched on the rise of millennials (who have, in Mendelson's words, "economic post-traumatic stress disorder" after the post-dotcom bubble burst and the 2008-2009 financial crisis), the increasing globalization of the mutual fund business (both in terms of customers and in terms of underlying investments), the threats on the cybersecurity front, the looming "Grexit" (Greece exiting the euro) possibility, how fantastic (an adjective used at least multiple times by the panelists in this context) target date funds are, and the future of retirement plans (gamification, perhaps?).
In response to Johnson's final question, the panelists offered their advice to aspiring future fundster leaders. And they did so in Twitter hashtag form: #keepitfresh (Aguilar said "the best learning usually comes with your mistakes"), #embracechange (Hoogensen), #askquestions (Mendelson said, "just because something works now or has for years doesn't mean it is permanent, logical, or even sensible"), and #beopen (and learn to adapt, said St. John).
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