Statistical Model Selection with `Big Data' by Sir David Hendry

As always, student members from the University of Reading Finance Society have provided a review of the most recent Industry Insights event:

The ICMA Centre is proud to announce its new academic partnership with the Global Association of Risk Professionals (GARP). The MSc Financial Risk Management is the first member of GARP’s Partnership for Risk Education in the United Kingdom. Through this partnership, our programme continues to align academic excellence and market intelligence, offering its graduates an insight of the new innovations in the area of risk management. With the support of GARP, we offer the most up to date aspects of risk management, tailored to the needs of the rapidly changing financial markets.

Fidelity, the asset manager with $2.4 trillion assets under management, recently announced the launch of two index mutual funds with a 0% fee! This announcement is interesting for several reasons. First, the asset management industry has been involved in an intense price war and this new fee level of 0% represents a very tough benchmark for the competition to beat. Not surprisingly, the share price of rival asset managers fell by a few percentage points shortly after the announcement. Second, the new fee level is unusual as it indicates that, for the first time, investors could get exposure to both US and international equities without incurring any fee. This is a curious business decision. How will Fidelity manage to pay for all its expenses? Will this product be a loss-making venture? Is there more to it than meets the eyes?