Jason Hsu, Ph.D., is my recent guest on the "Bogleheads on Investing" podcast

[Bogle Center]

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START LISTENING HERE

My guest this month is Jason Hsu, Ph.D., is one of the world’s top thought leaders on factor investing and the co-creator of the fundamental indexing™ methodology. We discuss his academic and professional careers, value investing, efficient markets, active management in the US and in China, and why less desirable Chinese companies prefer to list their shares on US stock exchanges rather than in China ( this was a shock to me!).

Jason has authored more than 40 peer-reviewed articles and won numerous research awards. Jason is a member of the board of directors at the Anderson School of Management at UCLA, as well as an adjunct professor in finance. He is an associate editor of the Journal of Investment Management and serves on the editorial board of the Financial Analysts Journal, the Journal of Index Investing, the Journal of Investment Consulting, and the Journal of Investment Management. Jason is the founder and chairman of Rayliant Global Advisors, and formally the co-founder and vice-chairman of Research Affiliates.

This podcast is hosted by Rick Ferri, CFA, a long-time Boglehead and investment adviser. This podcast is supported by the John C. Bogle Center for Financial Literacy, a non-profit organization approved by the IRS as a 501(c)(3) public charity on February 6, 2012. Your tax-deductible donation to the Bogle Center is appreciated.

Enjoy!

Your Host,
Rick Ferri

[Soon2BXProgrammer]

.
START LISTENING HERE

My guest this month is Jason Hsu, Ph.D., is one of the world’s top thought leaders on factor investing and the co-creator of the fundamental indexing™ methodology. We discuss his academic and professional careers, value investing, efficient markets, active management in the US and in China, and why less desirable Chinese companies prefer to list their shares on US stock exchanges rather than in China ( this was a shock to me!).

Jason has authored more than 40 peer-reviewed articles and won numerous research awards. Jason is a member of the board of directors at the Anderson School of Management at UCLA, as well as an adjunct professor in finance. He is an associate editor of the Journal of Investment Management and serves on the editorial board of the Financial Analysts Journal, the Journal of Index Investing, the Journal of Investment Consulting, and the Journal of Investment Management. Jason is the founder and chairman of Rayliant Global Advisors, and formally the co-founder and vice-chairman of Research Affiliates.

This podcast is hosted by Rick Ferri, CFA, a long-time Boglehead and investment adviser. This podcast is supported by the John C. Bogle Center for Financial Literacy, a non-profit organization approved by the IRS as a 501(c)(3) public charity on February 6, 2012. Your tax-deductible donation to the Bogle Center is appreciated.

Enjoy!

Your Host,
Rick Ferri

Great discussion about crypto!

[Rick Ferri]

Discussion on crypto?

Let’s not make this great podcast out to be something it is not. We spent fifty minutes talking about the evolution of factor investing in the US and China, then talked about China’s Central Bank’s initiative to development a crypto currency for perhaps two minutes at the end. That’s it.

[Soon2BXProgrammer]

Discussion on crypto?

Let’s not make this great podcast out to be something it is not. We spent fifty minutes talking about the evolution of factor investing in the US and China, then talked about China’s Central Bank’s initiative to development a crypto currency for perhaps two minutes at the end. That’s it.

Sorry was a joke.

It is very interesting how China's market is ruled by individual investors that aren't sophisticated. The same is true for their mutual fund industry being super concentrated and not diversified because the investors are fickle.

If i remember right, from the podcast, beta over the last 15 years was about 11%... What wasn't clear is how has Jason's strategies performed?

[Robert T]

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Thanks Rick. Interesting discussion.

Personally, I like the fundamental indexing methodology. Good to see Jason stepping out of the shadows of Rob Arnott with his own endeavor, and have been interested in what Rayliant has been doing, particularly since they launched an ETF at the end of last year.

Interesting discussion on the functioning of China's equity market, retail participation, and its fund management composition.

Here’s Jason Hsu (Rayliant’s) China ETF (inception 12/30/2020).
https://funds.rayliant.com/

“The Rayliant Quantamental China Equity ETF is an active, systematic approach to harvesting behavioral alpha by exploiting mispricings among Chinese stocks. The strategy is localized to China, applying specialized data and signals that capture unique features of Chinese markets, including novel aspects of China’s accounting, regulations, market structure, state ownership, and investor behavior.”

YTD returns (from M*)
9.49% = Rayliant Quantamental China Equity ETF (RAYC)
6.37% = iShares MSCI China A ETF (CNYA)
1.07% = iShares MSCI China ETF (MCHI)
1.49% = SPDR S&P China ETF (GXC)
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[Dave55]

Fascinating interview Rick, thanks. The ETF that Jason created (symbol: RAYC) will be one worth watching.

Dave

[HueyLD]

Fantastic discussions and an amazing guest.

What surprised me the most was that it is much easier for a Chinese company to be listed on the NYSE than on the Chinese and Hong Kong markets. I guess if we apply the same criteria in the U.S., too many people will have to go to jail for their incompetence.

[ckangas]

Jason Hsu makes a strong case for an active fund exception for emerging markets.
I just wish there was more data on RAYC and similar funds. But I'll certainly be keeping an eye on it.

[Hillview]

This was a great podcast. I’m not at all an expert but learned a ton and it was very accessible for the non expert.

[Rick Ferri]

Jason talked about why Chinese stocks listed in the United States have less oversight and are less creditworthy than Chinese stocks listed in China. That is now in the news as the Chinese government cracks down on companies that list in the US rather than in China.

Rick Ferri

[SimpleStupid]

I’m curious to know how one would/has integrated rayliant into their portfolio? And, is it worth re-jiggering a total market portfolio just to fit this in? I think china is typically 5% of a typical portfolio (as far as i’ve read), so i’m assuming for now the work required is not worth it. But better quality exposure to chinese markets (through rayliant) is probably a good idea in the coming decades, even if one’s portfolio isn’t tilting toward china as a whole.