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Jason Hsu: China Is 'the Last Great Remaining Alpha Reservoir'

The founder and chairman of Rayliant Global Advisors discusses the promise and challenges of investing in China, machine learning, and the investor timing gap.

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Our guest this week is Jason Hsu. Jason is founder and chairman of Rayliant Global Advisors, a quantitative asset manager based in Hong Kong. Jason also cofounded Research Affiliates with Robert Arnott and has been at the forefront of the fundamental indexing movement. Jason is a member of the board of directors at the Anderson School of Management at the University of California at Los Angeles, as well as an adjunct professor in finance there. He has authored more than 40 peer-reviewed articles, is an associate editor of the Journal of Investment Management, and serves on the editorial board of numerous other financial journals, including the Financial Analysts Journal. Jason earned his bachelor's in physics from the California Institute of Technology, his master's in finance from Stanford, and his doctorate in finance from UCLA.

Background

Bio

Rayliant Global Advisors

Research Affiliates

Anderson School of Management at UCLA

Journal of Investment Management

The Fundamental Index: A Better Way to Invest, by Robert D. Arnott, Jason C. Hsu, and John M. West

Investing in China

Timing Poorly: A Guide to Generating Poor Returns While Investing in Successful Strategies,” by Jason Hsu, Brett W. Myers, and Ryan Whitby, jpm.com, January 2016.

Buy the Best, Perform the Worst,” by John Rekenthaler, Morningstar.com, April 15, 2016.

In Defense of Alpha?!” by Jason Hsu, researchaffiliates.com, October 2017.

The Biggest Failure in Investment Management: How Smart Data Can Make It Better or Worse,” by John West and Jason Hsu, researchaffiliates.com, October 2018.

Where Retail Rules: Buying Into China’s Alpha Opportunity,” Rayliant.com, August 2019.

How Do Investor Returns Stack Up Against Total Returns?” by Amy C. Arnott, Morningstar.com, Aug. 18, 2020.

Should You Have More China in Your Portfolio? Putting Common Arguments for Increased Chinese Exposure to the Test,” by Jason Hsu, Xiang Liu, and Phillip Wool, The Journal of Index Investing, Winter 2020.

China’s Got Talent: Fund Manager Skill and Alpha in Chinese Stocks,” by Phillip Wool, rayliant.com, March 2021.

Chinese Market

The China Syndrome: Lessons From the A-Shares Bubble,” by Jason Hsu, researchaffiliates.com, September 2015.

Value, Growth and Bubbles: A Comparison Between China and US Markets,” by Jason Hsu, linkedin.com, Jan. 11, 2021.

Fewer Loans in China: Impactful, but Perhaps Not in the Way You’d Expect,” by Jason Hsu, rayliant.com, April 9, 2021.

Why Few Foreign Funds Are Entering China’s $3tr Mutual Fund Market,” by Twinkle Zhou, Asianinvestor.net, April 19, 2021.

’Tiger Mom’ Vs. Montessori: A Simple Analogy for Comparing Chinese and U.S. Financial Regulation,” by Jason Hsu, linkedin.com, March 4, 2021.

Quantitative Investing

The Surprising Alpha From Malkiel’s Monkey and Upside-Down Strategies,” by Robert D. Arnott, Jason Hsu, Vitali Kalesnik, and Phil Tindall, The Journal of Portfolio Management, Summer 2013.

A Framework for Assessing Factors and Implementing Smart Beta Strategies,” by Jason Hsu, Vitali Kalesnik, and Vivek Viswanathan, valuewalk.com, Summer 2015.

Rob Arnott: Don’t Sleep on Value Investing (Especially Emerging-Markets Value),” The Long View Podcast, Morningstar.com, Aug. 21, 2019.

Going Local: Developing a Quant Approach Specific to Emerging Markets,” by Phillip Wool, Rayliant.com, April 10, 2020.

Academic Research

The Harm in Selecting Funds That Have Recently Outperformed,” by Bradford Cornell, Jason Hsu, and David Nanigian, papers.ssrn.com, Feb. 25, 2016.

Coronavirus Crisis, Supertrends and Disruptive Innovations in Asset Management,” Financial Investigator Conference, rayliant.com, July 2, 2020.

When Dollar-Cost Averaging Can Help (or Hurt),” by Amy Arnott, Morningstar.com, Sept. 4, 2020.