CFA still worth it in an age of passive investing?

CFA General
#1

I am wondering what forum members think about the “worth” of the CFA designation in a world that is increasingly turning toward passive investment vehicles?

According to one recent study by Moody’s the total investment in passive funds (like ETF’s) is on track to pass active investment vehicles by 2024 at the latest.

http://www.institutionalinvestor.com/article/3658631/asset-management-indexing-and-etfs/study-passive-investments-set-to-surpass-active-by-2024.html#.WPUJOrnfN2M

I would imagine that the knowledge offered from completing the CFA will still be worthwhile and will still set someone apart…???

#2

You’ve go the wrong stereotype of a CFA Charterholder in a suit as a hedge fund manager making tonnes of alpha. Passive investing is still investing and needs a manager. For all I know you can do compliance as a CFA Charterholder.

#3

CFA is absolutely worth it.

The bigger passive investing gets, the more opportunities will arise for active managers. At least the good ones…

#4

The people managing the passive investment funds are probably more likely to have a cfa charter than those who run active management strats.

#5

Thanks for the replies. I figured a CFA would only help in an increasingly competitive world but good to hear some concrete examples.

#6

It’s all marketing, haven’t learned a damn thing from the CFA

#7

“It’s all marketing, haven’t learned a damn thing from the CFA”

Seriously? You didn’t learn anything from studying for the CFA? How does marketing with the CFA really make a ton of difference. Few regular blokes seem to know what a CFA is.

#8

^ I’m sure he’s kidding.

#9

I don’t see many jobs asking for CFAs. I just went through the resumes of a top 25 MS in Finance program. I’m in corporate finance but I saw about 1/3 saying that they had either passed Level I of the CFA or were a candidate for Level I. I didn’t see any that had passed Level II. If I was an investment management firm and saw nice grades (3.7+) in both undergrad and grad, good GMAT (700+) and Level I passage, I’d definitely interview them if they were US work eligible.

#10

Absolutely, active management is still relevant, just not active management in the prior form. I’ll explain in a bit…

As for the CFA still being relevant. All it ever was is a mark on your resume signaling to employers you’re dedicated to the industry and have basic knowledge of some core concepts. Lots of CFA holders aren’t direct investment folks, they’re performance, marketing, sales, etc. but its still useful to have. Will that ever go away, I do think one day due, especially in performance / client analytics side, but I think we got a while to go.

The world doesn’t need another stock picker trying to est AAPL’s revenue for a large cap growth fund. Now, if you want exposure to “large cap growth beta” you got ton of active funds, index funds, factor etfs, hedge funds, option strategies, etc. The job now is to pick the best among all your options.