Mark Glickman is Fixing a Hole in Beatles lore.A senior lecturer in statistics, Glickman worked with Ryan Song, a former statistics student at Harvard, and Jason Brown, a professor at Dalhousie University in Nova Scotia, to tackle an enduring Beatles mystery — who wrote “In My Life”?As most Beatles fans know, John Lennon and Paul McCartney disagreed over who authored the classic from the 1965 album “Rubber Soul,” but mathematics seems to have finally settled the dispute.The answer might make McCartney’s fans Cry Baby Cry. That’s Because the evidence strongly suggests that the song was written by Lennon.“We found that the musical content was much, much more consistent with John’s style,” Glickman said. “According to our model, it was quite likely to have been written by him. What that means is … if you compare ‘In My Life’ to Lennon songs from that period and McCartney songs from that period, it is just much more consistent with Lennon.”But for McCartney fans saying Wait, all hope is not lost.When the researchers separated the song’s verses from the bridge — what Lennon used to call the “middle eight” — they found Something interesting.“There was some question about whether McCartney wrote the bridge,” he said. “And it turns out that it’s close to a 50 percent chance that the middle eight was written by him, and the rest is likely to have been written by John.”To determine which Beatle wrote the song, the researchers spent A Hard Day’s Night developing an algorithm to apply “stylometry” — the use of statistical tools to determine authorship — to the band’s catalog.“In the context of textual analysis, the way this works is we have a bunch of documents that were written by one author, and a bunch written by another author,” Glickman explained. “The basic strategy in the analysis is to examine the frequency of certain kinds of words in those documents. In the songwriting context … the way we’re doing it is we’re treating songs as two parallel streams of ‘text’ to analyze the melody line and the chords or harmonic structure.”Interestingly, Glickman said, when the team began looking for the musical characteristics that could Carry That Weight for their analysis, what stood out were pairs of notes and pairs of chords.“We found pairs of melodic notes and chord pairs to be particularly distinguishing,” he said. “For example, one chord pair that tends to be much more common in a Lennon song than a McCartney song is going from the tonic to the minor sixth, which is a fairly standard rock motif — it’s going from the major tonic chord to its relative minor.”The tools developed for the study could easily be applied Here, There and Everywhere, he added.“I think the novelty of this kind of work, to some extent, is the realization that you can apply these kinds of existing tools … to music,” he said. “That really hasn’t been done before. And while the Beatles are the sandbox where we were using these techniques, these methods can be used more generally.“For example, if you were able to come up with a musical fingerprint of a songwriter or composer, you might be able to use these sorts of tools to make inferences about influence, almost like a phylogenetic tree, but for music.”
It also noted that cost efficiency, ease of trading and liquidity, diversification and risk management were the most important benefits of ETFs.Beyond this, participants increasingly viewed active ETFs as a tool to add alpha, or as a means to achieve specific investment objectives, like sustainable investing. Nearly half (40%) of all client money allocated to exchange-traded funds (ETFs) will be in active or smart beta strategies by 2023, according to the respondents* of JP Morgan Asset Management’s (JPMAM) Second Annual Global ETF Survey.Survey participants, already regular users of active and smart beta ETFs, believe their clients’ ETF allocations held in passive products will decline to 61% of portfolios over the next three years, while the share of assets in active and smart beta ETFs will continue to grow substantially.The Global ETF Study 2020 took place in April 2020, with 320 survey respondents in the US, EMEA, Asia Pacific and Latin America taking part. While US-based respondents expect active ETFs to rapidly gain an edge in the next few years, making up more than a quarter of ETF allocations by 2023, APAC based respondents predict smart beta products will grow significantly faster in that region, the survey showed. Source: JP Morgan Asset ManagementJed Laskowitz, global head of asset management solutions at JPMAM, said: “We’re seeing a significant shift in sentiment and in the way investors use ETFs in portfolios. They are exploring their options and increasingly looking to diversify their use of ETFs beyond passive strategies.“For example, the current and expected growth in ESG ETFs and active ETFs is proof that these vehicles are likely to play a bigger role across investor portfolios.”ESG demand drives ETF growthEnvironmental, social, and corporate governance (ESG) and thematic ETFs are seen as key growth drivers in the near future, the study revealed. Globally, more than half (59%) of respondents predicted strong growth in ESG ETFs by 2023, while 42% believe thematic ETFs will similarly grow over the same period.As ESG gains familiarity across the industry, many investors want to use ESG ETFs to help align their investments with their values and beliefs, according to respondents. ESG ETFs are earmarked for significant expansion by around seven in 10 respondents in EMEA (72%), Asia Pacific (70%) and Latin America (68%).Survey prticipants highlighted several factors were driving client appetite: rising concern over climate change; a growing perception that taking ESG criteria into account can enhance risk management and improve risk-adjusted returns; there was also a preference for a more values-based approach to investment from younger investors.ESG interest may also fuel the future growth of active ETFs, as these structures are well suited for such investment strategies, the study concluded. Furthermore, in this year’s IPE ETF Guide, IPE Magazine’s 8th annual report on the global ETF market for institutional investors, JPMAM highlights the advantages that active ETFs can bring to a portfolio and takes a closer look at how its Research-Enhanced Index (REI) strategy can provided investors with the “best of both worlds”.The guide, which includes JPMAM’s contribution, will be distributed with the October issue of IPE Magazine.*Survey respondents included independent wealth and asset managers, discretionary fund managers, independent advisory and brokerage firms, private banks, fund-of-funds, insurance companies and investment platforms for defined contribution plans. To download a summary of the survey results, click here.To read the digital edition of IPE’s latest magazine click here.