Natixis Global Asset Management will fund a three-year, $1 million research project to shed light on investors’ conflicts between a desire for returns on their investments and a fear of risk, Natixis announced Monday.
The project, to be conducted by the Massachusetts Institute of Technology, will focus on investor behavior and the personal benchmarks investors set. It will be conducted by industry thought leader Dr. Andrew W. Lo, professor of finance at the MIT Sloan School of Management. Lo also is the director of the MIT Laboratory for Financial Engineering, where the research will occur, and is chairman and chief investment strategist of AlphaSimplex Group, which is an investment firm that’s an affiliate of Natixis Global Asset Management.
The research will be based in part on Natixis’ data from its Durable Portfolio Construction Research Center’s global surveys of individual investors, financial advisors and institutional investors. The surveys have been conducted for five years and contain responses to more than 500 survey questions by more than 30,000 participants. Natixis is an investment company with $900 billion in assets under management.
“The research we’re funding at MIT will lay the foundation necessary to revolutionize traditional investment strategies designed to help investors build better portfolios and increase their chances of long-term success,” says John Hailer, CEO of Natixis Global Asset Management in the Americas and Asia.
The research will include a study of the use of indexing as a benchmark and will be designed to develop a modern approach to benchmarking based on an individual’s unique circumstances and market dynamics.
“The Holy Grail of developing automated, customized processes for making better investment decisions is not unique to our times or the financial industry,” says Lo. “But what is unique is the confluence of breakthroughs in financial technology, computer technology and institutional infrastructure that, for the first time in the history of modern civilization, makes automated personalized investment management a practical possibility.”