CFA Institute, the global association of investment professionals, announced the winners of the 2024 Graham & Dodd Awards of Excellence. The top award went to Fundamental Analysis via Machine Learning published on Financial Analysts Journal, written by Cao Kai, independent researcher; and You Haifeng, CFA and chair professor of accounting at the School of Economics and Management at Tsinghua University.

The paper Fundamental Analysis via Machine wins the Top Award of 2024 Graham and Dodd Awards of Excellence.

The research explores the integration of machine learning techniques into fundamental analysis, providing insights into how these methods can enhance investment decision making by more effectively extracting and utilizing information from financial statements. The authors found that machine learning can play a transformative role in enhancing the accuracy and efficacy of earnings forecasts, adding significant predictive power with respect to future stock returns. This superior performance appears attributable to the ability of machine learning to uncover new information through identifying economically important predictors and capturing nonlinear relationships.

The judging panel highlighted the article's relevance and potential to bridge traditional financial analysis with cutting-edge technology, making it highly valuable for CFA Institute members, practitioners, and academics alike.

Each year, Financial Analysts Journal, the flagship publication of CFA Institute, selects from the research articles published in the journal that year to receive the prestigious Graham & Dodd Awards of Excellence, recognizing the contributions of the research to the practice of investment management. The awards are named after Benjamin Graham and David L. Dodd to honor their enduring contributions to the field of financial analysis. A maximum of three awards are given: a Top Award recognizing the best research article and up to two Scroll Awards acknowledging the best runner-up article (s). This year's Scroll Award was Empirical Evidence on the Stock–Bond Correlation.

Margaret Franklin, CFA, President and CEO, CFA Institute, said: "The winning papers provide critical insights that add to our understanding of how AI can work purposefully in supporting the investment process, as well as important new analysis on a classic question concerning asset allocation within investment portfolios. I highly recommend the winning articles to Financial Analyst Journal readers and all students of the investment markets."

Source: CFA Institute

Editor: Ren Zhongxi