What Financial Services Marketers Can Learn From Brands Doing Live Video Well

What Financial Services Marketers Can Learn From Brands Doing Live Video Well

As a marketing professional, you probably know all about the live video marketing trend. It happens to be the big marketing idea right now. Unfortunately, the financial services industry hasn’t adopted this trend as much as other industries, and we think that’s a missed opportunity. Here’s what financial services marketers can learn from non-financial brands that are doing live video well.

What is live video?


In case you’re not clear on what live video is, it’s very much what it sounds like: video streamed live as events happen.

As a marketing technique, live video seems to have picked up steam since the launch of Facebook Live. We’re sure both your personal and professional Facebook streams have been hit with notifications that a specific person or company is now (or was) live.

Live video isn’t just for Facebook, though. You can go live on YouTube or on your company blog. Review your content strategy, take a look at the resources you have available, and choose the channel that makes the most sense for your firm.

Who’s doing it well?


Since we’re talking about video, it should come as no surprise that media properties are using this marketing tool particularly well.

Disney Interactive Media, for example, has established a production team dedicated to producing broadcast-quality live video. Thanks, once again, to Facebook Live, you may have had the opportunity to see the touring cast of Newsies perform the song “Santa Fe” actually live from Santa Fe.

Sure, it’s easy for a company like Disney that knows a thing or two about production value and making great videos. But here’s the thing: live video isn’t about broadcast-quality video. It’s about telling a story in real time and delivering that story to people who might otherwise get to participate in it. And that’s something content marketers already know how to do.

What story will you tell?


It’s up to you, but it should be a story that fits with your overall content strategy, doesn’t feel forced or staged, and doesn’t require a great deal of resources.

Maybe you have an investor presentation, industry conference or other event that you think non-attendees would be interested in. Have someone on your communications team film part of the event and stream it live on Facebook. This could be a great way to give your audience a behind-the-scenes look at the financial services industry and, at the same time, provide a learning opportunity. It could also benefit those who wanted to attend your event but couldn’t make it in person.

You probably won’t want to live stream the entire event, as you still want to provide value to those who attended in person. Instead, live stream meaningful snippets, enough to capture your audience’s attention and potentially drive interest in future events.

It’s up to you, but it should be a story that fits with your overall content strategy, doesn’t feel forced or staged, and doesn’t require a great deal of resources.

The nuts and bolts of live video


Before you go live, there are a few other things to keep in mind.

First, if your channel of choice for live video is YouTube or your company’s blog, rather than Facebook Live, you may want to invest in slightly higher production quality. But the great thing about live video is that you can decide how to approach it.

Second, live video doesn’t mean spontaneous video. If you want your video to have an impact, then people have to see it. It can’t hurt to take to your social media channels and give your audience a heads-up that you’re going live. Let them know when and where, as well as what the topic will be. That way, people will know to tune in.

Finally, never film people – including audience members – without their permission. And make sure your firm’s compliance department is comfortable with what you’re posting live.

Andrew Broadhead
Marketing
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Andrew Broadhead is Communications Manager at Ext. Marketing Inc., where he creates content that helps financial services firms engage their customers and prospects. Andrew’ ... Click for full bio

Alternative Beta Strategies: Alpha/Beta Separation Comes to Hedge Funds

Alternative Beta Strategies: Alpha/Beta Separation Comes to Hedge Funds

Written by: Yazann Romahi, Chief Investment Officer of Quantitative Beta Strategies, J.P. Morgan Asset Management

A quiet revolution is taking place in the alternatives world. The idea of alpha/beta separation has finally made its way from traditional to alternative investing. This development brings with it a more transparent, liquid and cost-effective approach to accessing the “alternative beta” component of hedge fund return and a new means for benchmarking hedge fund managers.

The good news for investors is that the separation of hedge fund return into its components—rules-based alternative beta and active manager alpha—has the potential to shift investing as we know it. These advancements could democratize hedge funds and, at long last, make what are essentially hedge fund strategies available to all investors—even those who aren’t willing to hand over the hefty fees often associated with hedge fund investing.

A benchmark for alternatives


With respect to traditional equity investing, we have long accepted the idea that there is a market return, or beta—but this hasn’t always been the case. Investors used to assume that to make money in the stock markets, one needed to buy the right stocks and avoid the wrong ones. The idea of a market return independent of skilled stock selection seemed ridiculous to most market participants. Yet today, we would never invest in an active manager’s strategy without benchmarking it against its respective beta.

Interestingly, hedge fund managers have been held to a different standard. Investors have been much more willing to accept the notion that hedge fund strategy returns are pure alpha, and that their investment returns are based entirely on the skill of the fund manager. That notion explains why investors have been willing to accept a “two and twenty” fee structure just to access what has been perceived as one of the most sophisticated and powerful investment vehicles available.

In thinking about the concept of beta, consider its precise definition—the return achievable by taking on a systematic exposure to an economically compensated risk. In traditional long only equity investing, the traditional market beta has been further refined as a number of other risks have been identified that are commonly referred to as “strategic beta.” These include factors such as value, momentum, quality and size. But no one ever said that these risk factors must be long-only.

Over the past decade, as more hedge fund data became available, academics began to disaggregate hedge fund return into two components: compensation for a systematic exposure to a long/short type of risk (alternative beta), and an unexplained “manager alpha.” What they found is that a significant portion of hedge fund return can be attributed to alternative beta. That fact has turned the tables on how we look at hedge fund return. With the introduction of the alternative beta concept, hedge fund managers will have to state their results, not just in terms of total return, but also as excess return over an alternative beta benchmark.

Merger arbitrage—an alternative beta example


The merger arbitrage hedge fund style can be used to illustrate the alternative beta concept. In the case of merger arbitrage, the beta strategy would be the systematic process of going long every target company, while shorting its acquirer. There is an inherent return to this strategy because the target stock price typically does not immediately rise to the offer price upon the deal’s announcement. This creates an opportunity to purchase the stock at a discount prior to the deal’s completion. The premium that remains is compensation to the investor for bearing the risk that the deal may fail.

Active merger arbitrage managers can add value by choosing to invest in some deals while avoiding others. Therefore, their benchmark should be the “enter every deal” strategy, not cash. In fact, the beta strategy explains the majority of the return to the average merger arbitrage hedge fund. And it doesn’t stop there. Other hedge fund styles that can be explained using alternative beta include equity long/short, global macro, and event driven. Note that the beta strategy invests in the same securities, using the same long/short techniques as the hedge fund strategy. The difference is that the beta strategy is a rules-based version that can become the benchmark for the hedge fund strategy. After all, if a hedge fund strategy cannot beat its respective rules-based benchmark (net of fees), an investor may be wiser to stick to the beta strategy.

Implications for investors


What does all this mean for the end investor? Hedge funds have traditionally been the domain of sophisticated investors willing to pay high fees and sacrifice liquidity. Alpha/beta separation in the hedge fund world means that investors can finally choose whether to buy the active version of the hedge fund strategy or opt for the passive (beta) version. Hedge fund strategies can be effective portfolio diversifiers. Now, through alternative beta, virtually all investors can access what are essentially hedge fund strategies in a low cost, liquid, and fully transparent form. For investors who haven’t had prior access to hedge funds, this could be welcome news. Not only can investors look at an active hedge fund manager’s strategy and determine how it has done compared to the systematic beta equivalent, they can also invest in ETFs that encapsulate these systematic strategies.

When looking at one’s traditional balanced portfolio today, there are plenty of questions around whether the fixed income portion will achieve the same level of diversification it has provided in the past. After all, with yields still low, there is little income return. Additionally, the capital gains that came from interest rate declines are likely to reverse. With fixed income unlikely to adequately fulfill its traditional role in portfolios, there is a need to find an alternative source of diversification. This is where alternative strategies may help. For investors seeking to access diversifying strategies in liquid and low-cost vehicles, alternative beta strategies in ETF form are one option.

Looking for an alternative to enhance diversification in your portfolio?


For investors looking to further diversify their overall portfolio, JPMorgan Diversified Alternatives ETF (JPHF) seeks to increase diversification and reduce overall portfolio volatility through direct, diversified exposure to hedge fund strategies using a bottom-up, rules-based approach.

Learn more about JPHF and J.P. Morgan’s suite of ETFs here

DISCLOSURE

Call 1-844-4JPM-ETF or visit www.jpmorganetfs.com to obtain a prospectus. Carefully consider the investment objectives and risks as well as charges and expenses of the ETF before investing. The summary and full prospectuses contain this and other information about the ETF. Read them carefully before investing.
J.P. Morgan Asset Management
Empowering Better Decisions
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See how ETFs differ from other investment vehicles, learn how to evaluate them, and discover how ETFs can be used effectively to achieve a diversity of investment strategies. ... Click for full bio