[MUSIC] Hi there, well this is the last part of this last book that we have done together, the last course and last but not least we have to say a few words about the future trends in investment management. So we'll have a look now at some key new trends in which we are active here at the University of Geneva. The first of these is sustainable finance so when we talk about sustainable finance we'll have a look at the definition first because this is I've noticed, a field where a lot of people talk about sustainable finance and do sustainable investing, but the definition used sometimes differ, and it's not always agreed upon. So we spend some time on trying to find an acceptable definition of what sustainable investing is all about. We looked also, in this module, at the various methodology, which can be used to construct a sustainable portfolio. And then the third issue once the SRI, the Socially Responsible Investment portfolio is constructed, then we have to address the key issue which is also a very regular. It comes very often in the discussions between the traditional money managers and those who are embracing this new approach of socially responsible investment is whether these manage to outperform, or at least perform in line, with the traditional investments. And we'll see what the evidence shows here. Linked to that is the key issue of whether we should treat the SRI, the Socially Responsible Investments as a separate asset class or whether they should become mainstream. I personally believe that SRI should become mainstream and should not be treated as a separate asset class. And to illustrate I want to tell you a personal story. A couple years ago I attended a conference here in Geneve. And I was with one lady here who is a pioneer investor according to the SRI criteria. And she manages funds in this space, as we say. So we attend this conference given by a famous hedge fund manager. And it's all about performance, staggering returns, leverage, risk. No word about SRI. And once he finishes his presentation, he gets off the stage, a lot of people come to him and try to give this business card to him saying I'm interested in your funds or maybe we can do business together blah, blah, blah. And so I noticed, it's quite funny actually. I noticed that the hedge fund manager, he had this approach whereby you would collect the business cards from the people and if he seemed a bit interested when he just said a few words, the business card would go in one pocket. And if it sounded a bit boring and, I don't know what to do with what he said, it went into another pocket [LAUGH]. So there I was with this lady, and call her Angela. And Angela says, throws at him, what do you do with SRI? Are you interested in SRI? And she gave him the business card. And the business card goes straight into the boring pocket. And he turns to her and he says, interesting concept but I dunno what to do with that and you don't make money for your clients with that. And then I said, Angela, don't talk about it as a separate asset class, as a style. Just say that for instance Warren Buffett, probably the world's most famous investor, has this unique approach whereby he says if you want to buy a share of General Motors, even if it's for $100, you should have the same energy, you should focus on your investment as if you were to buy the whole company. And obviously, if you want to buy the whole company, you're going to have an approach which focuses on the long run. I told Angela, just say that Warren Buffett have this same kind of framework in his thinking. And so she throws Warren Buffett to the hedge fund manager and he stops, gets his card, really, out of the boring pocket puts it in the other pocket and then gives his business card to Angela and he says then come to my office and explain to me an easier approach. So, while the end of the story is that she went to his office, but nothing really interesting happened between the two. The moral of the story is that if you present SRI as an integrated concept. I.e Ala Warren Buffet that you want to take all factors into account to see if the company you're purchasing would still be in the next ten 30, 50, years. Then obviously you attract a lot more attention from other potential investors. And then we're going to have a look at two other new trends which we see emerging in the finance sector. The first of these is neurofincance, and here's we're going to see how brain activity Influences our investment decisions and whether Euro finance can help us in a better understanding how emotions interact with our rational being when we have to construct portfolios. And last but not least but then we're going to have a look at the fintech, fintech is clearly the latest game in town. There's a key, there's a lot of debate on fintechs or it's the combination of finance and technology and basically there's a lot of heated debate on whether tomorrow's financial advisors will be robots. Indeed, the trend has started. But we'll see in this very last part of, of the course how robo-advisors can be used, whether it makes sense for possibly strategic asset allocation for instance. But maybe in the tactical asset allocation, it might be a bit more difficult to rely on the robot. So stay tuned for this very last part of the course and I hope you enjoy it. [MUSIC]
