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Hillsdale and CFA Society Toronto Announce Winner of 2023 Canadian Investment Research Award

Congratulations to the winners of the 2023 Hillsdale Investment Management – CFA Society Toronto Research Award. This year’s award-winning research paper is entitled “On the Use of Currency Forwards: Evidence from International Equity Mutual Funds”by Wei Opie, Ph.D, Senior Lecturer from the Faculty of Business and Law, Deakin Business School, Deakin University, Australia and Steven J. Riddiough, Ph.D, Associate Professor of Finance from the Department of Management, University of Toronto Scarborough; Finance Area, Rotman School of Management.

“I believe this paper is one of the first to seriously study currency hedging in the domain of equity mutual funds. Using hand-collected data the paper documents important empirical patterns of how international equity mutual funds use currency derivatives for their diverse purposes and objectives. The paper identifies a link between the use of currency derivatives in the equity fund management industry and currency factor premiums such as carry and momentum” - Chris Guthrie, CFA, President & CEO, CIO, Senior Portfolio Manager, and Founding Partner of Hillsdale Investment Management Inc. 

Research Paper Abstract

“The purpose of the study is to provide the most comprehensive account of exchange rate management within the investment management industry. We concentrate attention on the international equity mutual fund industry in the United States, which has grown to nearly $3 trillion in assets under management—making it critical to assess whether the industry’s practice is consistent with cutting-edge research findings. Our focus is on achieving a better understanding of the rationales for, and consequences of, decisions made at both the industry and fund levels. We ask three primary research questions: First, which funds choose to use currency forwards—the derivative contract that is used almost exclusively to manage exchange rate exposure—and how do they use them? Second, at the currency level, what are the main determinants of currency forward usage, and do the currency forwards enhance the investment performance of the fund? Third, among funds which do not use currency forwards, to what extent are they leaving “money-on-the-table” for their investors?”

Download a copy of the winning paper here.

The Hillsdale Investment Management – CFA Society Toronto Research Award is open to global researchers conducting research related to Canadian capital markets including both academics (e.g. professors and students) and practitioners.

Research papers are reviewed by a panel of CFA charter-holding experts to ensure they are in line with the rigorous values and standards embodied in the CFA designation.

“It is a privilege to support the applied research efforts of this award. Over the past 13 years, we received numerous submissions presenting innovative concepts helping to shape the investment landscape.” - Harry Marmer, CFA, Executive Vice President, and Partner, Hillsdale Investment Management Inc.

Learn more about the award

About CFA Society Toronto
Founded in 1936, CFA Society Toronto is part of the worldwide network of CFA Institute member societies that lead the investment profession globally by promoting the highest standards of ethics, education and professional excellence for the ultimate benefit of society. CFA Society Toronto represents the interests of approximately 11,000 investment professionals in the Greater Toronto Area through advocacy, education, events, and professional development. 

Read the full article here