OUR RESEARCH
With a background in academia and institutional investment banking, we believe in the power of research. As a boutique manager, we pride ourselves on our ability to deliver on this promise, actively engaging in research build on a proprietary artificial intelligence and machine learning framework unique to ILA.
Tech Talk Series Part 1: An Intro to Machine Learning in Finance
October 2021
1. Three Types of Machine Learning: Supervised, Unsupervised
and Reinforcement Learning.
2. How each type of Machine Learning is used in Finance.
3. How ILA Capital utilizes Supervised Learning for Credit Risk Modelling.
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2. How each type of Machine Learning is used in Finance.
3. How ILA Capital utilizes Supervised Learning for Credit Risk Modelling.
Post Pandemic: The U.S. Supply Chain and What it Means for Inflation
JUNE 2021
1. The global supply chain is becoming increasingly important to the health of the global economy.
2. We look at the far-reaching impact of COVID-19 on the global supply chain, the resulting shortages of essential goods, and the associated inflation-induced price increases affecting U.S businesses and consumers.
3. We analyze the impact on key industries, including food staples, gas, technology, and lumber, and consider the extent to which the current spike in inflation is transitory or whether it is here to stay.
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2. We look at the far-reaching impact of COVID-19 on the global supply chain, the resulting shortages of essential goods, and the associated inflation-induced price increases affecting U.S businesses and consumers.
3. We analyze the impact on key industries, including food staples, gas, technology, and lumber, and consider the extent to which the current spike in inflation is transitory or whether it is here to stay.
Has there really been "FICO Score Inflation" and why should you care?
FEBRUARY 2021
1. We carefully empirically test – and document – the existence of FICO Score Inflation in the universe of US Credit Scores.
2. As a part of this, we test the proprietary ILA Credit Score Model vs. FICO Credit Score Model – and show that ILA's proprietary risk scoring model, reduced to utilize only the credit variables, is superior to FICO score in risk discrimination.
3. Utilizing the cross-model set-up, we are able to show empirically that a substantial portion (roughly 40%) of the recent rise in FICO Scores is due not simply to creditworthiness increases – as many claim – but instead to a simple FICO Score Inflation...
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2. As a part of this, we test the proprietary ILA Credit Score Model vs. FICO Credit Score Model – and show that ILA's proprietary risk scoring model, reduced to utilize only the credit variables, is superior to FICO score in risk discrimination.
3. Utilizing the cross-model set-up, we are able to show empirically that a substantial portion (roughly 40%) of the recent rise in FICO Scores is due not simply to creditworthiness increases – as many claim – but instead to a simple FICO Score Inflation...
Post Pandemic Part 2: The U.S. Supply Chain and What it Means for Inflation
SEPTEMBER 2021
1. Since early 2020, pandemic-induced supply chain pressures and gaps have caused wide-ranging and persistent shortages of essential goods. These and the associated inflationary price increases continue to affect U.S businesses and consumers.
2. In this update, we review the ongoing impact on key industries, identify areas where we see some relief, and highlight food, gas, microchips and lumber.
3. We also consider the trajectory of inflation and its potential longer-term impact the remainder of 2021.
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2. In this update, we review the ongoing impact on key industries, identify areas where we see some relief, and highlight food, gas, microchips and lumber.
3. We also consider the trajectory of inflation and its potential longer-term impact the remainder of 2021.
Portfolio Immunization in a Low Yield World: How Rising Rates Will Impact Your Portfolio and What to Expect in 2021
MAY 2021
1. After hitting all-time lows in August 2020, US Treasury yields have
been moving higher and appear to have risk of further appreciation.
2. We are at historically low levels in terms of the yield-to-duration as measured by Bloomberg Barclays U.S. Corporate Bond Index.
3. For investors in fixed income, finding value in a rising rate environment can be challenging. We present the value of private credit in a portfolio to capture alpha without the downside risk of long duration credit.
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2. We are at historically low levels in terms of the yield-to-duration as measured by Bloomberg Barclays U.S. Corporate Bond Index.
3. For investors in fixed income, finding value in a rising rate environment can be challenging. We present the value of private credit in a portfolio to capture alpha without the downside risk of long duration credit.
Liquidity Spreads and the Place of Private Credit in Fixed Income Allocations
AUGUST 2021
1. After a strong period of equity performance and historically low
rates, many investors are looking to reallocate some gains to
fixed income.
2. Historically low yields make it difficult for investors to achieve returns they require. The 10-year US treasury return currently is yielding below 1.4%, well below what most investors expect.
3. The question many investors are now asking is: How can I achieve diversification within my portfolio while still getting the returns I need?
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2. Historically low yields make it difficult for investors to achieve returns they require. The 10-year US treasury return currently is yielding below 1.4%, well below what most investors expect.
3. The question many investors are now asking is: How can I achieve diversification within my portfolio while still getting the returns I need?
Cloud Commuting: How is Covid affecting U.S. migration trends and what will be the long-term impact?
MARCH 2021
1. Pre-COVID-19, U.S. Migration trends were at historical lows in 2019.
2. We analyzed data on the U.S. workforce migration during the pandemic to establish which cities are becoming hotspots and why.
3. We determined that the U.S. migration landscape has been evolving as technology innovations allow more knowledge workers to be remote.
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2. We analyzed data on the U.S. workforce migration during the pandemic to establish which cities are becoming hotspots and why.
3. We determined that the U.S. migration landscape has been evolving as technology innovations allow more knowledge workers to be remote.