The CIO of Johnson Financial Group, Brian Andrew, spoke to the Marquette University AIM students about risk factors as a tool for portfolio construction and performance reporting
|Brian Andrew, CIO of Johnson Financial|
The seniors in Dr. Krause’s AIM Investments class had an opportunity this week to hear from Brian Andrew, CFA, Chief Investment Officer at Johnson Financial Group.
Mr. Andrew talked about a rapidly developing topic in investment circles that involves risk factors. As he explained, traditional portfolio allocation approaches assume that diversifying across a wide range of asset classes will lead to a lower risk portfolio; however, instead of constructing portfolios using only the traditional asset class approach, risk factor portfolio construction can lead to a better understanding of portfolio risk exposures.
The presentation was well received by the students especially as Brian explained what smart beta was and how it was developed using risk factors. Simply stated, smart beta strategies attempt to deliver a better risk and return trade-off than conventional market cap weighted indices by using risk factor weighting schemes based on measures such as volatility, momentum, income, growth and liquidity.
Brian also waded into the active vs. passive investment debate – and provided the students with many important items to consider. He outlined the differences in the two approaches and made a case for using both passive and active investment strategies within a portfolio – including some of the smart beta ETFs to mitigate portfolio risk exposure.
|Brian Andrew and David Krause in the AIM Room|
Dr. Krause said, “As always, Brian did an excellent job in taking complex topics and explaining them in language our students understand – he also provides real-world example. He is usually ahead of the curve and in the case of risk factors, he clearly has created some important strategies for Johnson Financial clients. I also liked that he talked about knowing now to measure and evaluate both fixed income and equity managers’ performance in the context of risk exposure using factor analysis.”
Johnson Financial Group provides non-profit organizations and individuals with the investment strategies and education that needed to achieve their investment objectives. The firm consists of Johnson Bank, Johnson Insurance, and Cleary Gull Advisors. Brian is a frequent contributor to print and broadcast financial media. This month (9/26/17) Brian will be a guest speaker at the CFA Society of Milwaukee luncheon – click here for details.
Brian Andrew, CFA, is Johnson Financial Group’s Chief Investment Officer. He leads Johnson Financial Group’s investment strategy to provide consistent, actionable investment solutions for clients. With more than 26 years of experience in the financial services industry, Brian has led several investment management and advisory organizations, managing wealth and institutional portfolio assets. He has also managed portfolio assets for individuals and non-profit organizations including health care, senior living, foundation and university endowments.
In addition, Brian has led research groups conducting money manager research and due diligence. Brian is the Chairman of the Board of the National Hemophilia Foundation. He is also an adjunct professor for IE University’s graduate finance program, teaching portfolio management. Additionally, Brian, served on the Advisory Board for both the University of Wisconsin – Milwaukee, College of Health Sciences, and Marquette University’s Applied Investment Management program. He was also a director for a community development authority and school commission member for St. Charles School. Brian holds a BS in Business and Finance from the University of Minnesota in addition to the CFA designation.