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The Annual Report of the Society for Financial Studies for 2019–2020

The Annual Report of the Society for Financial Studies for 2019–2020 The Society for Financial Society (SFS) is a global, nonprofit academic society in finance. It owns and runs three academic journals: (1) the Review of Asset Pricing Studies, (2) the Review of Corporate Finance Studies, and (3) the Review of Financial Studies. It also organizes two annual academic conferences: (1) the SFS Cavalcade Asia-Pacific and (2) the SFS Cavalcade North America. It also runs several smaller, specialized conferences and financially supports and co-sponsors other independent conferences. Its governing board is the SFS Council. This annual report provides an overview of SFS activities during 2019-2020, including all three journals, both Cavalcade conferences, and the SFS financial and policy report. The purpose of this annual report is to share this information more broadly with SFS members and friends and to create a permanent record for the long-run (i.e., institutional memory). 1. Review of Asset Pricing Studies, by Jeffrey Pontiff, Executive Editor 2020 was a busy year for the Review of Asset Pricing Studies (RAPS). We renewed Associate Editors Clemens Sialm and Dimitri Vayanos. We added a special COVID-19 issue. This issue contained 11 papers and an introduction by Lars Peter Hansen. We expect that these papers will provide a foundation for future finance and economics research that is related to COVID. Between May 2019 and May 2020, our submissions increased by 28.8% to 206. Our acceptance rate fell to 5.3%. We planned on having three 2020 issues, but we ended up having four issues due to the extra COVID issue. In 2021, we will have four issues. In a few short years, our printed content has expanded considerably. We continue to be a selective “boutique” journal. Our authors enjoy, on average, quick turnaround, and a short wait from first submission to publication. Each normal issue has four-to-five papers and is delivered to the entire Review of Financial Studies subscriber base, so each paper receives a lot of attention. Our challenge is to attract high quality papers from assistant professors. Since RAPS is not yet considered one of the big three, some assistant professors are reluctant to send to RAPS before exhausting other opportunities. We are seeing improvement on this front. In 2021, RAPS is likely to publish at least three papers for which all of the authors are assistant professors. Historically, solicited papers comprise about 15% of RAPS content. We continue to aggressively search for high quality content. As an example of success on this front, our January 2021 issue will feature John Cochrane’s “Rethinking Production under Uncertainty.” 2. Review of Corporate Finance Studies, by Andrew Ellul, Executive Editor 2.1 Overview Between 5/15/19 and 5/15/20, our paper submissions stood at 201, up by almost 65% from the previous year (submissions between 5/15/18 and 5/15/19 were 122 papers). The acceptance rate was 6.97%, down from the previous year’s 9%. The trajectory of paper submissions increased significantly, as a consequence of the increased visibility of the journal and the many initiatives taken by the Editorial Board. The Impact Factor (more precisely, the pseudo Impact Factor) stood at 1.938 as of July 2019, up from 1.625. We have increased the number of issues per year from two to three, an important milestone in the development of the journal. The number of papers published in 2019 stood at 11, up from 8 papers in each of the previous two years. The projected number of papers published during 2020 is 18. We have plans to start publishing four issues per year as from 2021, reflecting the growth we are experiencing. 2.2 Editorial Board The Editorial Board appointed new Associate Editors who started their first term from July 1, 2020. We are very pleased to have Heitor Almeida (University of Illinois at Urbana-Champaign), Jonathan Cohn (University of Texas at Austin), Sudipto Dasgupta (Chinese University of Hong Kong), Elena Loutskina (University of Virginia Darden), Andrey Malenko (University of Michigan), Paige Oiumet (University of North Carolina), Giorgia Piacentino (Columbia), Adriano Rampini (Duke), and Martin Schmalz (University of Oxford) joining us as Associate Editors. 2.3 Initiatives Our biggest challenge is to continue sustaining robust growth in the submission of high quality papers. The statistics reported above show that we can be cautiously optimistic that the goal will be reached in the near future as long as we keep working hard and increasing the journal’s visibility. We need to keep firm our quality threshold and find ways that can differentiate us from other journals. In view of the above, the editorial team embarked on a number of initiatives. The following are the major ones. 2.4 Prior Review Process As of June 1, 2020, we introduced the Prior Review Process (PRP) where authors of submitting papers share with the editorial team the paper’s prior reviews (exclusively from top finance/economics journals) to make a quick and informed decision on how best to handle the submission and reach convergence relatively quickly. This allows us to attract the interest of a number of academics who may be interested in receiving a relatively fast decision on their papers and for the editorial team to make informed decisions based (partly) on previous feedback the authors received. 2.5 Registered Reports We are about to introduce the first Registered Report initiative where we invite authors to submit research proposals on a specific topic and the editorial team will make a decision on the merits of the proposal. We will use a two-stage review process: (a) the first stage is the call for Registered Reports which will be in the spirit of detailed research proposals, preferably with some preliminary results, and (b) in the second stage, the editorial team will choose the most promising Reports, provide detailed comments and then determine whether the authors have successfully executed on their proposals. With this initiative, we hope to transfer some of the risk from authors to the editorial team and encourage research in new areas. To that end, proposals that survive the first stage will be offered an in-principle acceptance for publication in the Review of Corporate Finance Studies (RCFS) before the final results are known. We have chosen the first topic to be on “Discrimination, Disparities, and Diversity in Finance.” 2.6 COVID-19 Special Issue As of the time of writing this Report, the world is grappling with the high human and economic losses from the outbreak of the COVID-19. Corporations and their employees are among those in the eye of the storm. Through our research, we are called to make a positive contribution to our communities. The Editorial Board decided to devote a special issue to the economic impact of the COVID-19 pandemic on corporations and their employees. With this objective in mind, we organized this special issue featuring papers that are among the best of the early research we have seen written over the first few months. We want to cast as big a net as possible in the area of corporate finance and financial intermediation, to mirror the impacts engendered by the pandemic. 2.7 Conferences with Dual Submits Conferences with dual submits, sometimes supported financially by the SFS, are helping us in generating a larger paper flow. It is true that these dual submit papers place additional pressure on the limited resources of the editorial team but ultimately this is of great benefit for the journal’s visibility. Between 5/15/19 and 5/15/20, the RCFS was involved in a number of conferences, and the major were: (1) RCFS-RAPS Winter Conference, (2) Chinese University of Hong Kong–RCFS Conference on Corporate Finance and Financial Intermediation (held in Asia), and (3) Centre for Studies in Economics and Finance–RCFS Conference on Finance, Labor, and Inequality (held in Europe). In conclusion, we believe we are making good progress to reach bigger goals in the future, but the process will be long and challenging. 3. Review of Financial Studies, by Itay Goldstein, Executive Editor 3.1 Overview This report describes the state of the Review of Financial Studies (RFS) and the key developments over the year 2019-2020. It is based on the presentation at the annual North American meeting of the Society of Financial Studies Cavalcade that was hosted virtually (due to the COVID-19 pandemic) by Indiana University from May 25-28, 2020. In this report, I first present the updates on our editorial team. I then present key statistics on the RFS submissions, editorial decisions, and impact. Finally, I discuss some initiatives and other news. 3.2 Editorial Team Table 1 presents the editorial team of the RFS and the changes in it over the last year. We continue to run the journal with a team of one Executive Editor and seven Editors. All eight of us handle papers and make decisions. This is my second year as Executive Editor of the journal. Among the Editors, we had three retirements: Wei Jiang, Stijn van Nieuwerburgh, and Philip Strahan. We added three new Editors: Stefano Giglio, Gregor Matvos, and Tarun Ramadorai. Table 1 FS editorial team Open in new tab Table 1 FS editorial team Open in new tab The table also shows the team of over 20 Associate Editors that assist us in the editorial job. As always, we had about one third of the team stepping down, and had them replaced with new ones. Following the change implemented last year, we continue to run the editorial process in a way that involves the Associate Editors more in editorial decisions. This involves asking them for feedback on close-call decisions, on desk rejections, and on appeals. Finally, we continue to rely heavily on Jaclyn Einstein (Managing Editor), Jan Sokolowsky (Advisory Editor), and Scott Guernsey (Advisory Editor), in their diligent work preparing manuscripts for processing and providing background information. 3.3 Key Statistics on Submissions, Editorial Decisions, and Impact Figure 1 presents the evolution of submissions to the RFS over the last few years. In the figure, only submissions received via the Editorial Express system are counted. Between May 7, 2019 and May 7, 2020, we had 1,388 new submissions and 303 resubmissions in the system, bringing the total to 1,691. This presents growth of 3.6% in new submissions. If we add the 483 submissions received via the dual submission process, which were not invited to be formally submitted in the Editorial Express system, we get a total number of submissions of 2,174. Figure 1 Open in new tabDownload slide RFS submissions Figure 1 Open in new tabDownload slide RFS submissions Even without dual submissions (which might add noise to total numbers), our submission numbers are higher than those in the other top-three finance journals. From recent public records, the Journal of Finance (JF) receives 1,211 total submissions a year and the Journal of Financial Economics (JFE) receives 1,593 total submissions a year, which are both below our 1,691. Figure 2 presents key statistics on the speed and efficiency of our process. Of course, with such volume of submissions, it is a challenge to keep the process as efficient, but we keep this as a high priority. The median turnaround time we had this year has decreased to 45 days (based on public records, it is higher than JFE at 28 days, but lower than JF at 48 days). Our average turnaround time is 55 days. For the number of late decisions, which we define as decisions taking over 120 days, we saw a significant decrease relative to last year to 31, which is about 1.8% of our total flow. Figure 2 Open in new tabDownload slide RFS turnaround statistics Figure 2 Open in new tabDownload slide RFS turnaround statistics Figure 3 presents information about two types of editorial decisions: the acceptance rate and the desk rejection rate. The acceptance rate in the figure is out of the new submissions in the system and it reached 9.73% this past year, which is still high in perspective of recent years. However, given that dual submissions that make it to the system are those that have been positively pre-screened, this rate is not indicative of the unconditional chance that a paper ends up being accepted. For this, the rate out of total new submissions including dual submissions not in the system is a better indicator, and it has been at 7.21% this past year. Still, the optimistic message is that the RFS is accepting more papers than in the past; a total of 135 papers were accepted between May 2019 and May 2020. Given the growth in the profession, we think it is important not to be stagnant with the number of published papers, as long as standards are not compromised. The desk rejection rate in the last year was 17.36%, which is higher than the previous year. Figure 3 Open in new tabDownload slide RFS editorial decisions Figure 3 Open in new tabDownload slide RFS editorial decisions Finally, Figure 4 presents information about the impact factor of RFS. The 2018 number showed an increase in the two-year impact factor to 4.975, significantly higher than every year in the last five years. The numbers for JF and JFE for 2018 were 6.201 and 4.693, respectively. The five-year impact factor for the RFS (not shown in the figure) has also climbed and is now at 6.663. Figure 4 Open in new tabDownload slide RFS impact factor Figure 4 Open in new tabDownload slide RFS impact factor Figure 5 Open in new tabDownload slide Total submissions to large finance conferences Figure 5 Open in new tabDownload slide Total submissions to large finance conferences Figure 6 Open in new tabDownload slide Paper acceptance rates at large finance conferences Figure 6 Open in new tabDownload slide Paper acceptance rates at large finance conferences 3.4 Editorial Initiatives and Other News The most significant policy development of the last year is the approval of a code sharing policy, which went into effect on July 1, 2020. The policy requires authors of accepted papers to make their code available publicly. We think that this is an important step for the standards of publications at the RFS and in the finance profession more generally. At this point, we do not require data sharing, which is more complicated, but rather just encourage it. If authors do not share the data, they have to provide pseudo data to demonstrate how the code works. Full details of the policy are available on our website. The RFS continues to sponsor dual submission conferences. The demand for such sponsorships from various conferences has grown a lot in recent years and the RFS needs to be selective and focus attention on those that present the best fit. One direction here is to focus on advancing unique topics with potential for special issues or half special issues. This goes to reinforce the position RFS takes in attempting to promote new directions and topics of research. A few such recent and forthcoming conferences are: (1) FinTech, joint with Georgia State, sponsored by Itay Goldstein and Manju Puri, February 2020; (2) Big Data, joint with NBER, sponsored by Itay Goldstein, December 2020; (3) Private-Value Assets, joint with Yale, sponsored by Stijn van Nieuwerburgh, January 2020; and (4) Insurance, joint with NBER, sponsored by Ralph Koijen, March 2020. In addition, we continue collaborations with older conference-series, such as Miami Behavioral Finance (sponsored by Lauren Cohen) and Texas Finance Festival (sponsored by Itay Goldstein and Holger Mueller). 4. 2019 SFS Cavalcade Asia-Pacific, by Kalok Chan, Calvalcade Chair The 2019 SFS Cavalcade Asia-Pacific conference was held in Hong Kong from December 6-8, and the University of Hong Kong (HKU) was the host university. The success of this conference benefited from the help of many people, including from the SFS Jaclyn Einstein and Leigh Ann Clark, as well as the advice and support of SFS officers Laura Starks and Craig Holden. The Host Faculty Sponsor was Dragon Tang (HKU), who worked tirelessly with his supporting staff Fanny Yeung and Laurie Tang to organize the conference. As Program Chair, I also benefited greatly from the frequent advice and support of the Vice Chair, Jun-Koo Kang (NTU), and last year’s Program Chair, Ron Masulis (UNSW). The 2019 SFS Cavalcade Asia-Pacific received 367 submissions, 34 of which were student submissions. 12 submissions (4 student submissions) were dual submissions with the Review of Asset Pricing Studies, and 12 submissions (7 student submissions) were dual submissions with the Review of Corporate Finance Studies. The conference accepted 60 papers, implying an overall acceptance rate of 16.3%. In comparison, the 2018 conference received 511 submissions (59 papers accepted) and the 2017 conference received 387 submission (52 papers accepted). The conference review process involved 112 reviewers with an average of 7 papers per reviewer. The majority of reviewers returned reviews on schedule with a few reviewers delaying the review process by two weeks. The average score for all submitted papers was 6.3. The average score for accepted papers was 8.5. There were 20 sessions and each session consisted of 3 papers for a total of 60 papers on the program. It was quite a challenge organizing the 2019 conference, due to social unrest in Hong Kong since June. This has affected the number of submissions and registered participants. But the conference was held successfully in the executive teaching facilities of HKU Business School in Cyberport (off the main campus) from Friday morning until Sunday noon (i.e, the conference was 2.5 days long). Some presenters were unable to attend, and seven papers were presented via Skype, but it all worked well. The conference was well attended; some rooms were full in the first two days. We did encounter some mild drop-off in attendance on the last day. Listed below is the number of submissions by category, where some papers chose 2 or more categories: Asset Pricing (Empirical): 121 Asset Pricing (Theory): 25 Banking/Financial Intermediation (Empirical): 63 Banking/Financial Intermediation (Theory): 14 Behavioral (Corporate): 14 Behavioral (Investments): 52 Corporate (Empirical): 115 Corporate (Theory): 15 Derivatives: 21 Fixed Income Securities: 25 Governance/Corporate Control: 39 Information and Securities Markets / Market Microstructure: 51 Money Management: 22 Other: 25 The conference gave out three best paper awards: – Best Paper in Corporate Finance: “Freeze! Financial Sanctions and Bank Responses” by Matthias Efing, Stefan Goldbach, Volker Nitsch – Arthur Warga Award for the Best Paper in Fixed Income: “How Safe Are Safe Havens” by Sven Klingler and Suresh Sundaresan – Best Paper in Asset Pricing: “Expectations in the Cross Section: Stock Price Reactions to the Information and Bias in Analyst-Expected Returns” by Johnathan Loudis. I am honored to have been the keynote speaker for the conference with the topic on Mainland-Hong Kong Stock Connect. I would like to express my sincere gratitude to Dragon Tang and his administrative staff, who have done a remarkable job in organizing the conference despite the challenges encountered. 5. 2020 SFS Cavalcade North America, by Monica Piazzesi, Cavalcade Chair I would like to acknowledge the invaluable help of many people who contributed to the success of the SFS Cavalcade North America. In particular the event organizers: from the SFS, Jaclyn Einstein, and from Indiana University, Craig Holden, Pam Potter, Zach Watt, and the finance faculty who served as Kelley Faculty Hosts in the sessions. I also would like to thank my co-chairs, Ulrike Malmendier and Andrea Eisfeldt, and the SFS Advisory Chair Josef Zechner, and the support from the SFS board and editors, especially Laura Starks. 5.1 Virtual Conference The Cavalcade was scheduled to be held in-person at the UNC Kenan-Flagler Business School. When COVID-19 hit, it became impossible to hold the conference in-person. Instead of canceling the Cavalcade, the Indiana University Kelley School of Business offered to serve as virtual host and SFS accepted the offer. The SFS Cavalcade North America, which was held May 25-28, 2020, was the first large-scale (135 papers on the program) finance conference to be held virtually! Since the usual expenses of a physical conference (food, drink, receptions, meeting rooms, ground transportation, etc.) did not have to be borne, conference registration was offered free to anyone, anywhere in the world, who could be verified as being a faculty member, doctoral student, or otherwise legitimate finance researcher. As a result, more than 2,000 people from 44 countries registered for the conference. 47.5% of the registrants live outside of the US. This was truly a global conference. A large number of doctoral students registered (670). Virtual conferences allow doctoral students to expand the scope of their learning to include a wide variety of the profession’s best researchers. The average number of participants in the research paper sessions was 48.5. Since there were nine parallel sessions, the average number of conference participants at any one time was 436.8. This is far more participation than past Cavalcade conferences. Most three-day conferences have a steep drop-off on the third day as people head to the airport. The average number of conference participants on day three only declined moderately (397.0 on day three vs. 449.0 on day one and 464.4 on day two). 5.2 Conference Statistics The total submissions last year were 1,221 as shown in Figure 5. We accepted 135 papers in 9 parallel sessions, which kept the SFS Cavalcade at the same size as the prior year. The overall acceptance rate is 11%, which is in line with most of the other major finance conferences, like AFA and EFA, as shown in Figure 6. Only the WFA has a lower acceptance rate at about 7%. 5.3 Review Process To improve the speed of the review process and lower the burden on individual reviewers, we invited 300 reviewers. As a result, we ended up with an allocation of about 10 papers per reviewer. This seems to be an acceptable rate at the moment, but if submissions keep going up, we might have to expand the pool of reviewers further. Like in past years, we had a few issues with the timing of the reviews. A number of reviewers were very late with their reviews and some reviewers decide late in the review process that papers do not match them. 5.4 Composition of Submissions Many authors select several categories for their paper submissions. Some of our categories are more general (such as Empirical Investments or Corporate Finance Theory), while others are subfields of these general categories (such as Fixed Income or Banking Theory). Instead of presenting statistics about the various categories, we emphasize that the lion share of submissions went to the “Empirical” category of Banking, Behavioral Corporate Finance, Corporate Finance, Investments, Governance/Corporate Control, Household Finance, and Macro Finance. There were far fewer submissions to the “Theory” category. Interestingly, the acceptance rate of the “Theory” papers were higher across all categories. We conclude that while few theory papers were submitted, the quality of these submissions was high. 5.5 Suggestions for the Future Finally, we realized that sessions involve a significant time commitment. A session at the Cavalcade is a mini-conference that extends over the entire day. The day-long format makes it difficult to recruit session chairs. Moreover, each paper has an hour dedicated to itself. In the future, organizers should consider splitting sessions into half-days. Also, it would make sense to reduce the time per paper to 45 minutes or so. This suggestion will be particularly relevant if the next Cavalcade will still be online, but should also apply if we will be lucky to have our normal lives back and will be able to meet in person. The next SFS Cavalcade will be a virtual conference in May 2021 hosted by the MIT Golub Center for Finance and Policy. 6. SFS Financial and Policy Report, by Craig Holden, SFS Secretary-Treasurer The financial condition of SFS was strong already and got much stronger in 2019. Table 2 reports the SFS Balance Sheet as of the end of the year from 2016-2019. As of 12/31/2019, we have $7.9 million is assets and $0.7 million in liabilities for a surplus of $7.2 million. The Society has no debt. Our liabilities are exclusively banked referee fees that will be paid out to referees in the future. Table 2 SFS balance sheet 2016-2019 ASSETS . 12/31/2016 . 12/31/2017 . 12/31/2018 . 12/31/2019 . Bank Funds   Checking $184,123 $175,692 $200,275 $242,199   Savings $602,122 $0 $0 $0 Total Bank Funds $786,244 $175,692 $200,275 $242,199 Investments (at Market Value)*   Short-Term Treasury Index Fund $0 $599,057 $608,296 $632,761   US S&P 500 Stock Index Fund $1,824,521 $2,221,871 $2,122,648 $2,790,684   Developed Countries Stock Index Fund $1,468,928 $2,008,790 $1,736,869 $2,119,014   Emerging Countries Stock Index Fund $1,428,542 $2,079,341 $1,774,783 $2,098,887 Total Investments $4,721,992 $6,909,059 $6,242,596 $7,641,346 TOTAL ASSETS $5,508,236 $7,084,751 $6,442,871 $7,883,545 LIABILITIES (Banked Referee Fees) $454,160 $524,100 $596,580 $660,120 SURPLUS $5,054,076 $6,560,651 $5,846,291 $7,223,425 * Arthur Warga Endowment (Part of Invest.) $30,577 $35,666 $31,840 $40,399 ASSETS . 12/31/2016 . 12/31/2017 . 12/31/2018 . 12/31/2019 . Bank Funds   Checking $184,123 $175,692 $200,275 $242,199   Savings $602,122 $0 $0 $0 Total Bank Funds $786,244 $175,692 $200,275 $242,199 Investments (at Market Value)*   Short-Term Treasury Index Fund $0 $599,057 $608,296 $632,761   US S&P 500 Stock Index Fund $1,824,521 $2,221,871 $2,122,648 $2,790,684   Developed Countries Stock Index Fund $1,468,928 $2,008,790 $1,736,869 $2,119,014   Emerging Countries Stock Index Fund $1,428,542 $2,079,341 $1,774,783 $2,098,887 Total Investments $4,721,992 $6,909,059 $6,242,596 $7,641,346 TOTAL ASSETS $5,508,236 $7,084,751 $6,442,871 $7,883,545 LIABILITIES (Banked Referee Fees) $454,160 $524,100 $596,580 $660,120 SURPLUS $5,054,076 $6,560,651 $5,846,291 $7,223,425 * Arthur Warga Endowment (Part of Invest.) $30,577 $35,666 $31,840 $40,399 Open in new tab Table 2 SFS balance sheet 2016-2019 ASSETS . 12/31/2016 . 12/31/2017 . 12/31/2018 . 12/31/2019 . Bank Funds   Checking $184,123 $175,692 $200,275 $242,199   Savings $602,122 $0 $0 $0 Total Bank Funds $786,244 $175,692 $200,275 $242,199 Investments (at Market Value)*   Short-Term Treasury Index Fund $0 $599,057 $608,296 $632,761   US S&P 500 Stock Index Fund $1,824,521 $2,221,871 $2,122,648 $2,790,684   Developed Countries Stock Index Fund $1,468,928 $2,008,790 $1,736,869 $2,119,014   Emerging Countries Stock Index Fund $1,428,542 $2,079,341 $1,774,783 $2,098,887 Total Investments $4,721,992 $6,909,059 $6,242,596 $7,641,346 TOTAL ASSETS $5,508,236 $7,084,751 $6,442,871 $7,883,545 LIABILITIES (Banked Referee Fees) $454,160 $524,100 $596,580 $660,120 SURPLUS $5,054,076 $6,560,651 $5,846,291 $7,223,425 * Arthur Warga Endowment (Part of Invest.) $30,577 $35,666 $31,840 $40,399 ASSETS . 12/31/2016 . 12/31/2017 . 12/31/2018 . 12/31/2019 . Bank Funds   Checking $184,123 $175,692 $200,275 $242,199   Savings $602,122 $0 $0 $0 Total Bank Funds $786,244 $175,692 $200,275 $242,199 Investments (at Market Value)*   Short-Term Treasury Index Fund $0 $599,057 $608,296 $632,761   US S&P 500 Stock Index Fund $1,824,521 $2,221,871 $2,122,648 $2,790,684   Developed Countries Stock Index Fund $1,468,928 $2,008,790 $1,736,869 $2,119,014   Emerging Countries Stock Index Fund $1,428,542 $2,079,341 $1,774,783 $2,098,887 Total Investments $4,721,992 $6,909,059 $6,242,596 $7,641,346 TOTAL ASSETS $5,508,236 $7,084,751 $6,442,871 $7,883,545 LIABILITIES (Banked Referee Fees) $454,160 $524,100 $596,580 $660,120 SURPLUS $5,054,076 $6,560,651 $5,846,291 $7,223,425 * Arthur Warga Endowment (Part of Invest.) $30,577 $35,666 $31,840 $40,399 Open in new tab SFS has $7.6 million in investments. The SFS investment policy is to hold approximately $600K in a nearly risk-free asset (i.e., a short-term Treasury index fund) and put the rest in three low-fee, passive stock index funds to approximate the global stock portfolio. The Arthur Warga endowment fund, which supports the Arthur Warga Awards for the best paper in fixed income at our two SFS Cavalcade conferences, was worth $40,399 at the end of 2019. The endowment is invested in the same manner as our other investments and is part of the total investments reported above. Table 3 reports the SFS Income Statement for the calendar years from 2016-2019. The revenues and expenses are grouped into three broad activity categories: journals, Cavalcade conferences, and SFS support of conferences organized by others. In addition, the revenues include a separate line for gains or losses on our investments. For 2019, total revenue was $2,520K and total expense was $955K for a net income of $1,565K. All of the gain ($1,587K) came from gains on our investment portfolio. Essentially, 2019 was a good year for the global stock market. The drivers of our losses and gains are broken out in more detail in Table 4 and discussed further below. Table 3 SFS income statement 2016-2019 . 2016 . 2017 . 2018 . 2019 . REVENUE Journals   Submission Revenue $376,770 $381,567 $415,260 $403,580   Income from Oxford $442,204 $426,279 $410,964 $398,150   Journal-Hosted Conferences $0 $0 $5,000 $22,757 Total Journals $818,974 $807,846 $831,224 $824,487 Cavalcades   Cavalcade Submission $42,800 $61,758 $84,383 $61,145   Cavalcade Registration $38,255 $47,771 $47,107 $35,132 Total Cavalcades $81,055 $109,529 $131,490 $96,277 SFS Support $6,569 $22,766 $40,187 $12,782 Investment Gains $355,107 $1,334,223 ($666,466) $1,586,567 TOTAL REVENUE $1,261,705 $2,274,363 $336,435 $2,520,113 EXPENSES Journals   Paid Referee Fees $256,960 $271,380 $289,600 $282,360   Change in Banked Referee Fees $65,050 $69,940 $72,480 $63,540   Submission Refunds $16,233 $19,120 $18,678 $6,840   Merchant Service and Bank Fees $12,830 $11,435 $20,202 $20,379   Editorial Express $14,000 $14,000 $14,000 $15,000   Journal Professional Fees $133,141 $183,273 $267,169 $190,138   Payroll IRS/NC/VA Payments $53,756 $51,718 $60,681 $58,505   Copy Editor fees $30,943 $48,790 $46,961 $66,525   Journal Award Amounts $53,000 $51,000 $79,667 $66,333   Journal Award Plaques and T-shirts $10,339 $5,896 $5,700 $7,395   Council and Editors Dinner and Misc. $9,724 $12,594 $2,020 $7,993   Journal-Hosted Conferences $0 $5,000 $63,446 $73,665 Total Journals $655,975 $744,146 $940,603 $858,673 Cavalcades   Cavalcade Submission Software $0 $3,451 $3,211 $4,489   Cavalcade Professional Fees $0 $19,971 $5,500 $15,840   Cavalcade Food and Transportation $21,348 $22,729 $41,595 $0   Cavalcade Travel $2,600 $5,078 $10,417 $18,277   Cavalcade Best Paper Awards $2,700 $3,300 $3,403 $3,725   Cavalcade Misc. Expenses $12,670 $14,056 $8,402 $29,646 Total Cavalcades $39,318 $68,585 $72,528 $71,977 SFS Support   Support of Other Conferences $37,191 $36,060 $9,737 $4,318   Misc. Support Expenses $10,960 $8,882 $28,807 $20,275 Total SFS Support $48,150 $44,942 $38,543 $24,593 TOTAL EXPENSES $743,444 $857,674 $1,051,673 $955,243 NET INCOME $518,261 $1,416,690 ($715,238) $1,564,871 . 2016 . 2017 . 2018 . 2019 . REVENUE Journals   Submission Revenue $376,770 $381,567 $415,260 $403,580   Income from Oxford $442,204 $426,279 $410,964 $398,150   Journal-Hosted Conferences $0 $0 $5,000 $22,757 Total Journals $818,974 $807,846 $831,224 $824,487 Cavalcades   Cavalcade Submission $42,800 $61,758 $84,383 $61,145   Cavalcade Registration $38,255 $47,771 $47,107 $35,132 Total Cavalcades $81,055 $109,529 $131,490 $96,277 SFS Support $6,569 $22,766 $40,187 $12,782 Investment Gains $355,107 $1,334,223 ($666,466) $1,586,567 TOTAL REVENUE $1,261,705 $2,274,363 $336,435 $2,520,113 EXPENSES Journals   Paid Referee Fees $256,960 $271,380 $289,600 $282,360   Change in Banked Referee Fees $65,050 $69,940 $72,480 $63,540   Submission Refunds $16,233 $19,120 $18,678 $6,840   Merchant Service and Bank Fees $12,830 $11,435 $20,202 $20,379   Editorial Express $14,000 $14,000 $14,000 $15,000   Journal Professional Fees $133,141 $183,273 $267,169 $190,138   Payroll IRS/NC/VA Payments $53,756 $51,718 $60,681 $58,505   Copy Editor fees $30,943 $48,790 $46,961 $66,525   Journal Award Amounts $53,000 $51,000 $79,667 $66,333   Journal Award Plaques and T-shirts $10,339 $5,896 $5,700 $7,395   Council and Editors Dinner and Misc. $9,724 $12,594 $2,020 $7,993   Journal-Hosted Conferences $0 $5,000 $63,446 $73,665 Total Journals $655,975 $744,146 $940,603 $858,673 Cavalcades   Cavalcade Submission Software $0 $3,451 $3,211 $4,489   Cavalcade Professional Fees $0 $19,971 $5,500 $15,840   Cavalcade Food and Transportation $21,348 $22,729 $41,595 $0   Cavalcade Travel $2,600 $5,078 $10,417 $18,277   Cavalcade Best Paper Awards $2,700 $3,300 $3,403 $3,725   Cavalcade Misc. Expenses $12,670 $14,056 $8,402 $29,646 Total Cavalcades $39,318 $68,585 $72,528 $71,977 SFS Support   Support of Other Conferences $37,191 $36,060 $9,737 $4,318   Misc. Support Expenses $10,960 $8,882 $28,807 $20,275 Total SFS Support $48,150 $44,942 $38,543 $24,593 TOTAL EXPENSES $743,444 $857,674 $1,051,673 $955,243 NET INCOME $518,261 $1,416,690 ($715,238) $1,564,871 Open in new tab Table 3 SFS income statement 2016-2019 . 2016 . 2017 . 2018 . 2019 . REVENUE Journals   Submission Revenue $376,770 $381,567 $415,260 $403,580   Income from Oxford $442,204 $426,279 $410,964 $398,150   Journal-Hosted Conferences $0 $0 $5,000 $22,757 Total Journals $818,974 $807,846 $831,224 $824,487 Cavalcades   Cavalcade Submission $42,800 $61,758 $84,383 $61,145   Cavalcade Registration $38,255 $47,771 $47,107 $35,132 Total Cavalcades $81,055 $109,529 $131,490 $96,277 SFS Support $6,569 $22,766 $40,187 $12,782 Investment Gains $355,107 $1,334,223 ($666,466) $1,586,567 TOTAL REVENUE $1,261,705 $2,274,363 $336,435 $2,520,113 EXPENSES Journals   Paid Referee Fees $256,960 $271,380 $289,600 $282,360   Change in Banked Referee Fees $65,050 $69,940 $72,480 $63,540   Submission Refunds $16,233 $19,120 $18,678 $6,840   Merchant Service and Bank Fees $12,830 $11,435 $20,202 $20,379   Editorial Express $14,000 $14,000 $14,000 $15,000   Journal Professional Fees $133,141 $183,273 $267,169 $190,138   Payroll IRS/NC/VA Payments $53,756 $51,718 $60,681 $58,505   Copy Editor fees $30,943 $48,790 $46,961 $66,525   Journal Award Amounts $53,000 $51,000 $79,667 $66,333   Journal Award Plaques and T-shirts $10,339 $5,896 $5,700 $7,395   Council and Editors Dinner and Misc. $9,724 $12,594 $2,020 $7,993   Journal-Hosted Conferences $0 $5,000 $63,446 $73,665 Total Journals $655,975 $744,146 $940,603 $858,673 Cavalcades   Cavalcade Submission Software $0 $3,451 $3,211 $4,489   Cavalcade Professional Fees $0 $19,971 $5,500 $15,840   Cavalcade Food and Transportation $21,348 $22,729 $41,595 $0   Cavalcade Travel $2,600 $5,078 $10,417 $18,277   Cavalcade Best Paper Awards $2,700 $3,300 $3,403 $3,725   Cavalcade Misc. Expenses $12,670 $14,056 $8,402 $29,646 Total Cavalcades $39,318 $68,585 $72,528 $71,977 SFS Support   Support of Other Conferences $37,191 $36,060 $9,737 $4,318   Misc. Support Expenses $10,960 $8,882 $28,807 $20,275 Total SFS Support $48,150 $44,942 $38,543 $24,593 TOTAL EXPENSES $743,444 $857,674 $1,051,673 $955,243 NET INCOME $518,261 $1,416,690 ($715,238) $1,564,871 . 2016 . 2017 . 2018 . 2019 . REVENUE Journals   Submission Revenue $376,770 $381,567 $415,260 $403,580   Income from Oxford $442,204 $426,279 $410,964 $398,150   Journal-Hosted Conferences $0 $0 $5,000 $22,757 Total Journals $818,974 $807,846 $831,224 $824,487 Cavalcades   Cavalcade Submission $42,800 $61,758 $84,383 $61,145   Cavalcade Registration $38,255 $47,771 $47,107 $35,132 Total Cavalcades $81,055 $109,529 $131,490 $96,277 SFS Support $6,569 $22,766 $40,187 $12,782 Investment Gains $355,107 $1,334,223 ($666,466) $1,586,567 TOTAL REVENUE $1,261,705 $2,274,363 $336,435 $2,520,113 EXPENSES Journals   Paid Referee Fees $256,960 $271,380 $289,600 $282,360   Change in Banked Referee Fees $65,050 $69,940 $72,480 $63,540   Submission Refunds $16,233 $19,120 $18,678 $6,840   Merchant Service and Bank Fees $12,830 $11,435 $20,202 $20,379   Editorial Express $14,000 $14,000 $14,000 $15,000   Journal Professional Fees $133,141 $183,273 $267,169 $190,138   Payroll IRS/NC/VA Payments $53,756 $51,718 $60,681 $58,505   Copy Editor fees $30,943 $48,790 $46,961 $66,525   Journal Award Amounts $53,000 $51,000 $79,667 $66,333   Journal Award Plaques and T-shirts $10,339 $5,896 $5,700 $7,395   Council and Editors Dinner and Misc. $9,724 $12,594 $2,020 $7,993   Journal-Hosted Conferences $0 $5,000 $63,446 $73,665 Total Journals $655,975 $744,146 $940,603 $858,673 Cavalcades   Cavalcade Submission Software $0 $3,451 $3,211 $4,489   Cavalcade Professional Fees $0 $19,971 $5,500 $15,840   Cavalcade Food and Transportation $21,348 $22,729 $41,595 $0   Cavalcade Travel $2,600 $5,078 $10,417 $18,277   Cavalcade Best Paper Awards $2,700 $3,300 $3,403 $3,725   Cavalcade Misc. Expenses $12,670 $14,056 $8,402 $29,646 Total Cavalcades $39,318 $68,585 $72,528 $71,977 SFS Support   Support of Other Conferences $37,191 $36,060 $9,737 $4,318   Misc. Support Expenses $10,960 $8,882 $28,807 $20,275 Total SFS Support $48,150 $44,942 $38,543 $24,593 TOTAL EXPENSES $743,444 $857,674 $1,051,673 $955,243 NET INCOME $518,261 $1,416,690 ($715,238) $1,564,871 Open in new tab Table 4 SFS income by activity 2016-2019 PROFIT BY ACTIVITY . 2016 . 2017 . 2018 . 2019 . Journal Profit $162,999 $63,700 ($109,379) ($34,185) Cavalcades Profit $41,737 $40,943 $58,963 $24,300 SFS Support Profit ($41,581) ($22,176) $1,644 ($11,811) Operating Income $163,154 $82,466 ($48,772) ($21,696) Investment Gains $355,107 $1,334,223 ($666,466) $1,586,567 NET INCOME $518,261 $1,416,690 ($715,238) $1,564,871 PROFIT BY ACTIVITY . 2016 . 2017 . 2018 . 2019 . Journal Profit $162,999 $63,700 ($109,379) ($34,185) Cavalcades Profit $41,737 $40,943 $58,963 $24,300 SFS Support Profit ($41,581) ($22,176) $1,644 ($11,811) Operating Income $163,154 $82,466 ($48,772) ($21,696) Investment Gains $355,107 $1,334,223 ($666,466) $1,586,567 NET INCOME $518,261 $1,416,690 ($715,238) $1,564,871 Open in new tab Table 4 SFS income by activity 2016-2019 PROFIT BY ACTIVITY . 2016 . 2017 . 2018 . 2019 . Journal Profit $162,999 $63,700 ($109,379) ($34,185) Cavalcades Profit $41,737 $40,943 $58,963 $24,300 SFS Support Profit ($41,581) ($22,176) $1,644 ($11,811) Operating Income $163,154 $82,466 ($48,772) ($21,696) Investment Gains $355,107 $1,334,223 ($666,466) $1,586,567 NET INCOME $518,261 $1,416,690 ($715,238) $1,564,871 PROFIT BY ACTIVITY . 2016 . 2017 . 2018 . 2019 . Journal Profit $162,999 $63,700 ($109,379) ($34,185) Cavalcades Profit $41,737 $40,943 $58,963 $24,300 SFS Support Profit ($41,581) ($22,176) $1,644 ($11,811) Operating Income $163,154 $82,466 ($48,772) ($21,696) Investment Gains $355,107 $1,334,223 ($666,466) $1,586,567 NET INCOME $518,261 $1,416,690 ($715,238) $1,564,871 Open in new tab Table 4 breaks out SFS income by activity for the calendar years 2016-2019. In 2019, we lost $34K on our three journals (RAPS, RCFS, and RFS), made $24K on our two Cavalcade conferences (Asia-Pacific and North America), and lost $12K on SFS support for an operating loss of $22K. And as previously mentioned, we made $1,587K on our investments. The four-year, time-series of investment gains show significant volatility over time, as we would expect based upon our investment in risky assets, but the long-run average is strongly positive. The Cavalcade conferences have made a small positive profit every year, which is consistent with the SFS Council policy that they at least be self-supporting. The SFS support category is generally expected to be negative because we give away money to help support worthwhile conferences organized by others. In 2018, this category was positive based on our success in obtaining donations. This brings us to the journal category. In the past, we have consistently made $150K to $200K income on our top-tier journals. Journal profit dropped to $64K in 2017 and dropped further to a loss of $109K in 2018. This decline in journal profit was primary driven by six independent decisions (described in more detail last year’s annual report), each of which was a rational and sensible decision by itself, but each of which added cost to running our journals. To bring our journals out of the red, the SFS Council decided to make two adjustments going forward: (1) the new journal-hosted conferences for RAPS and RCFS will charge submission and registration fees with the aim that the conferences will become self-supporting and (2) lower some of the journal award amounts. As a result, our journal losses were reduced by $75K in 2019. Due to oddities of how our SFS Winter Conference revenues and expenses split across the calendar years, I expect the journal losses to go even lower in 2020 and may even get back to being positive. Table 5 reports the returns of the underlying SFS investments over the calendar years 2016-2019. All three passive stock index funds had positive capital gain returns in 2019. Specifically, the US S&P 500 index fund return was 28.61%, the Developed Countries stock index fund return was 18.18%, and the Emerging Countries stock index fund return was 15.09%. The average dividend yield across all three was 2.99%. The Short-Term Treasury index fund return was 2.33%. The average expense fee on our three passive, stock index funds was 4.2 basis points. Table 5 Returns of the underlying SFS investments (2016-2019) . 2016 . 2017 . 2018 . 2019 . Expense Fee . 10 Year Return . Capital Gain Returns  US S&P 500 Stock Index Fund (FXAIX) 9.11% 19.29% −6.80% 28.61% 1.5 Bpts 11.68%  Developed Countries Stock Index (FSPSX) −1.70% 22.25% −15.82% 18.18% 3.5 Bpts 3.70%  Emerging Countries Stock Index (FPADX) 9.59% 34.87% −16.39% 15.09% 7.6 Bpts 0.95%  Portfolio Average (1/3 weight in each) 5.67% 25.47% −13.00% 20.63% 4.2 Bpts 5.44% Dividend Yield 2.44% 2.63% 1.68% 2.99% Short-Term Treasury Index Fund (FUMBX) 0.87% 0.67% 1.47% 2.33% 3.0 Bpts 1.90% . 2016 . 2017 . 2018 . 2019 . Expense Fee . 10 Year Return . Capital Gain Returns  US S&P 500 Stock Index Fund (FXAIX) 9.11% 19.29% −6.80% 28.61% 1.5 Bpts 11.68%  Developed Countries Stock Index (FSPSX) −1.70% 22.25% −15.82% 18.18% 3.5 Bpts 3.70%  Emerging Countries Stock Index (FPADX) 9.59% 34.87% −16.39% 15.09% 7.6 Bpts 0.95%  Portfolio Average (1/3 weight in each) 5.67% 25.47% −13.00% 20.63% 4.2 Bpts 5.44% Dividend Yield 2.44% 2.63% 1.68% 2.99% Short-Term Treasury Index Fund (FUMBX) 0.87% 0.67% 1.47% 2.33% 3.0 Bpts 1.90% Open in new tab Table 5 Returns of the underlying SFS investments (2016-2019) . 2016 . 2017 . 2018 . 2019 . Expense Fee . 10 Year Return . Capital Gain Returns  US S&P 500 Stock Index Fund (FXAIX) 9.11% 19.29% −6.80% 28.61% 1.5 Bpts 11.68%  Developed Countries Stock Index (FSPSX) −1.70% 22.25% −15.82% 18.18% 3.5 Bpts 3.70%  Emerging Countries Stock Index (FPADX) 9.59% 34.87% −16.39% 15.09% 7.6 Bpts 0.95%  Portfolio Average (1/3 weight in each) 5.67% 25.47% −13.00% 20.63% 4.2 Bpts 5.44% Dividend Yield 2.44% 2.63% 1.68% 2.99% Short-Term Treasury Index Fund (FUMBX) 0.87% 0.67% 1.47% 2.33% 3.0 Bpts 1.90% . 2016 . 2017 . 2018 . 2019 . Expense Fee . 10 Year Return . Capital Gain Returns  US S&P 500 Stock Index Fund (FXAIX) 9.11% 19.29% −6.80% 28.61% 1.5 Bpts 11.68%  Developed Countries Stock Index (FSPSX) −1.70% 22.25% −15.82% 18.18% 3.5 Bpts 3.70%  Emerging Countries Stock Index (FPADX) 9.59% 34.87% −16.39% 15.09% 7.6 Bpts 0.95%  Portfolio Average (1/3 weight in each) 5.67% 25.47% −13.00% 20.63% 4.2 Bpts 5.44% Dividend Yield 2.44% 2.63% 1.68% 2.99% Short-Term Treasury Index Fund (FUMBX) 0.87% 0.67% 1.47% 2.33% 3.0 Bpts 1.90% Open in new tab Next, let me turn to policy. I am the SFS representative to our publisher, Oxford University Press, and in that role address a variety of policy issues. Perhaps you did a literature search recently and were quickly glancing through an SFS journal PDF paper on your computer screen when you encountered a landscape table that was displayed sideways (at a 90-degree angle). Yes, you could print the paper out, but it is faster and easier to turn your head 90 degrees and try to quickly interpret it that way. What a pain in the neck! Well, you won’t have that problem anymore. At our request, Oxford has rotated all landscape pages in PDF papers by 90 degrees so that they always display upright on the computer screen. What a concept! This change will not have any impact on the way that the PDF paper prints out. This 90-degree rotation for landscape pages has been implemented for the entire 30+ year archive of our three SFS journals and will be the default going forward. Enjoy the pain-free screen reading! The print versions of our journals have always had colorful cover pages in primary colors: blue for RFS, green for RAPS, and red for RCFS. However, the PDF version of our journal papers only have a small footnote at the bottom of the first page that tells you what journal the paper is from. We have now corrected this situation by adding colorful journal banners at the top of all journal papers going forward in time. Here is what they look like: Figure 7 plots personal “print and online” subscriptions (blue circles) to SFS journals and student “print and online” subscriptions (red squares) over time. Both type of subscriptions have steadily declining over the past 14 years. Projecting the trend forward, personal “print and online” subscriptions are forecast to hit near zero in 2021 and student “print and online” subscriptions are projected to hit zero even earlier. This is part of the general decline of print subscriptions, which is broad trend across all academic journals in all disciplines. Figure 7 Open in new tabDownload slide SFS individual “print and online” subscriptions over time Figure 7 Open in new tabDownload slide SFS individual “print and online” subscriptions over time Based on this trend, the SFS Council voted to eliminate both personal “print and online” subscriptions and student “print and online” subscriptions. This change has now gone into effect. So individuals are no longer able to buy a “print and online” subscription to SFS journals, but a personal “online only” subscription continues to be available. Figure 8 plots academic (i.e., university library) “print only” subscriptions (blue circles) and academic “print + online” subscriptions (red squares) over time. Like the individual subscription trend, both types of academic subscriptions involving print have steadily declined. Figure 8 Open in new tabDownload slide SFS academic subscribers over time Figure 8 Open in new tabDownload slide SFS academic subscribers over time Not show in Figure 8 are two other types of subscriptions: (1) academic “online only” subscriptions and (2) academic consortia “online only” subscriptions. Academic consortia subscriptions involve custom deals negotiated by multiple universities and so there are no unit quantities for this category. Both categories have grown rapidly over time and now represent the large majority of our subscription income. Figure 9 compares SFS incremental profit WITH print (red circles) versus SFS incremental profit WITHOUT print subscriptions (blue squares). The WITHOUT print scenario assumes that: (1) 95% of print and online academic subscribers will switch to online-only subscriptions, (2) 60% of print only academic subscribers will switch to online-only subscriptions, and (3) print production expenses (which involve relatively large fixed costs) will be avoided. The graph shows that incremental profit WITH print will go negative by 2023. However, long before that point, the graph shows incremental profit WITHOUT print is greater than incremental profit WITH print starting in 2020. I anticipate that SFS will vote to discontinue all print subscriptions soon. Figure 9 Open in new tabDownload slide Incremental profit with and without print Figure 9 Open in new tabDownload slide Incremental profit with and without print 7. Acknowledgements There are many people who contributed their time and efforts make SFS run smoothly. We acknowledge and thank the 2019-2020 members of the SFS Council, who hail from across the globe: President Laura Starks, University of Texas at Austin Vice President Josef Zechner, Vienna University of Economics and Business Secretary-Treasurer Craig W. Holden, Indiana University Council Chair Raman Uppal, EDHEC Business School Renee Adams, University of Oxford Alon Brav, Duke University Allaudeen Hameed, National University of Singapore Kai Li, UBC Sauder School of Business Tarun Ramadorai, Imperial College London Karin Thorburn, Norwegian School of Economics. We acknowledge and thank the 2019-2020 SFS staff: Jaclyn Einstein, Managing Director and Editor Jan Sokolowsky, Advisory Editor Scott Guernsey, Advisory Editor Xin Fan, Advisory Editor. Leigh Ann Clark, Cavalcade Organizer. © The Author(s) 2021. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For permissions, please email: journals.permissions@oup.com This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/open_access/funder_policies/chorus/standard_publication_model) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Review of Asset Pricing Studies Oxford University Press

The Annual Report of the Society for Financial Studies for 2019–2020

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Publisher
Oxford University Press
Copyright
Copyright © 2021 Society for Financial Studies
ISSN
2045-9920
eISSN
2045-9939
DOI
10.1093/rapstu/raab001
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Abstract

The Society for Financial Society (SFS) is a global, nonprofit academic society in finance. It owns and runs three academic journals: (1) the Review of Asset Pricing Studies, (2) the Review of Corporate Finance Studies, and (3) the Review of Financial Studies. It also organizes two annual academic conferences: (1) the SFS Cavalcade Asia-Pacific and (2) the SFS Cavalcade North America. It also runs several smaller, specialized conferences and financially supports and co-sponsors other independent conferences. Its governing board is the SFS Council. This annual report provides an overview of SFS activities during 2019-2020, including all three journals, both Cavalcade conferences, and the SFS financial and policy report. The purpose of this annual report is to share this information more broadly with SFS members and friends and to create a permanent record for the long-run (i.e., institutional memory). 1. Review of Asset Pricing Studies, by Jeffrey Pontiff, Executive Editor 2020 was a busy year for the Review of Asset Pricing Studies (RAPS). We renewed Associate Editors Clemens Sialm and Dimitri Vayanos. We added a special COVID-19 issue. This issue contained 11 papers and an introduction by Lars Peter Hansen. We expect that these papers will provide a foundation for future finance and economics research that is related to COVID. Between May 2019 and May 2020, our submissions increased by 28.8% to 206. Our acceptance rate fell to 5.3%. We planned on having three 2020 issues, but we ended up having four issues due to the extra COVID issue. In 2021, we will have four issues. In a few short years, our printed content has expanded considerably. We continue to be a selective “boutique” journal. Our authors enjoy, on average, quick turnaround, and a short wait from first submission to publication. Each normal issue has four-to-five papers and is delivered to the entire Review of Financial Studies subscriber base, so each paper receives a lot of attention. Our challenge is to attract high quality papers from assistant professors. Since RAPS is not yet considered one of the big three, some assistant professors are reluctant to send to RAPS before exhausting other opportunities. We are seeing improvement on this front. In 2021, RAPS is likely to publish at least three papers for which all of the authors are assistant professors. Historically, solicited papers comprise about 15% of RAPS content. We continue to aggressively search for high quality content. As an example of success on this front, our January 2021 issue will feature John Cochrane’s “Rethinking Production under Uncertainty.” 2. Review of Corporate Finance Studies, by Andrew Ellul, Executive Editor 2.1 Overview Between 5/15/19 and 5/15/20, our paper submissions stood at 201, up by almost 65% from the previous year (submissions between 5/15/18 and 5/15/19 were 122 papers). The acceptance rate was 6.97%, down from the previous year’s 9%. The trajectory of paper submissions increased significantly, as a consequence of the increased visibility of the journal and the many initiatives taken by the Editorial Board. The Impact Factor (more precisely, the pseudo Impact Factor) stood at 1.938 as of July 2019, up from 1.625. We have increased the number of issues per year from two to three, an important milestone in the development of the journal. The number of papers published in 2019 stood at 11, up from 8 papers in each of the previous two years. The projected number of papers published during 2020 is 18. We have plans to start publishing four issues per year as from 2021, reflecting the growth we are experiencing. 2.2 Editorial Board The Editorial Board appointed new Associate Editors who started their first term from July 1, 2020. We are very pleased to have Heitor Almeida (University of Illinois at Urbana-Champaign), Jonathan Cohn (University of Texas at Austin), Sudipto Dasgupta (Chinese University of Hong Kong), Elena Loutskina (University of Virginia Darden), Andrey Malenko (University of Michigan), Paige Oiumet (University of North Carolina), Giorgia Piacentino (Columbia), Adriano Rampini (Duke), and Martin Schmalz (University of Oxford) joining us as Associate Editors. 2.3 Initiatives Our biggest challenge is to continue sustaining robust growth in the submission of high quality papers. The statistics reported above show that we can be cautiously optimistic that the goal will be reached in the near future as long as we keep working hard and increasing the journal’s visibility. We need to keep firm our quality threshold and find ways that can differentiate us from other journals. In view of the above, the editorial team embarked on a number of initiatives. The following are the major ones. 2.4 Prior Review Process As of June 1, 2020, we introduced the Prior Review Process (PRP) where authors of submitting papers share with the editorial team the paper’s prior reviews (exclusively from top finance/economics journals) to make a quick and informed decision on how best to handle the submission and reach convergence relatively quickly. This allows us to attract the interest of a number of academics who may be interested in receiving a relatively fast decision on their papers and for the editorial team to make informed decisions based (partly) on previous feedback the authors received. 2.5 Registered Reports We are about to introduce the first Registered Report initiative where we invite authors to submit research proposals on a specific topic and the editorial team will make a decision on the merits of the proposal. We will use a two-stage review process: (a) the first stage is the call for Registered Reports which will be in the spirit of detailed research proposals, preferably with some preliminary results, and (b) in the second stage, the editorial team will choose the most promising Reports, provide detailed comments and then determine whether the authors have successfully executed on their proposals. With this initiative, we hope to transfer some of the risk from authors to the editorial team and encourage research in new areas. To that end, proposals that survive the first stage will be offered an in-principle acceptance for publication in the Review of Corporate Finance Studies (RCFS) before the final results are known. We have chosen the first topic to be on “Discrimination, Disparities, and Diversity in Finance.” 2.6 COVID-19 Special Issue As of the time of writing this Report, the world is grappling with the high human and economic losses from the outbreak of the COVID-19. Corporations and their employees are among those in the eye of the storm. Through our research, we are called to make a positive contribution to our communities. The Editorial Board decided to devote a special issue to the economic impact of the COVID-19 pandemic on corporations and their employees. With this objective in mind, we organized this special issue featuring papers that are among the best of the early research we have seen written over the first few months. We want to cast as big a net as possible in the area of corporate finance and financial intermediation, to mirror the impacts engendered by the pandemic. 2.7 Conferences with Dual Submits Conferences with dual submits, sometimes supported financially by the SFS, are helping us in generating a larger paper flow. It is true that these dual submit papers place additional pressure on the limited resources of the editorial team but ultimately this is of great benefit for the journal’s visibility. Between 5/15/19 and 5/15/20, the RCFS was involved in a number of conferences, and the major were: (1) RCFS-RAPS Winter Conference, (2) Chinese University of Hong Kong–RCFS Conference on Corporate Finance and Financial Intermediation (held in Asia), and (3) Centre for Studies in Economics and Finance–RCFS Conference on Finance, Labor, and Inequality (held in Europe). In conclusion, we believe we are making good progress to reach bigger goals in the future, but the process will be long and challenging. 3. Review of Financial Studies, by Itay Goldstein, Executive Editor 3.1 Overview This report describes the state of the Review of Financial Studies (RFS) and the key developments over the year 2019-2020. It is based on the presentation at the annual North American meeting of the Society of Financial Studies Cavalcade that was hosted virtually (due to the COVID-19 pandemic) by Indiana University from May 25-28, 2020. In this report, I first present the updates on our editorial team. I then present key statistics on the RFS submissions, editorial decisions, and impact. Finally, I discuss some initiatives and other news. 3.2 Editorial Team Table 1 presents the editorial team of the RFS and the changes in it over the last year. We continue to run the journal with a team of one Executive Editor and seven Editors. All eight of us handle papers and make decisions. This is my second year as Executive Editor of the journal. Among the Editors, we had three retirements: Wei Jiang, Stijn van Nieuwerburgh, and Philip Strahan. We added three new Editors: Stefano Giglio, Gregor Matvos, and Tarun Ramadorai. Table 1 FS editorial team Open in new tab Table 1 FS editorial team Open in new tab The table also shows the team of over 20 Associate Editors that assist us in the editorial job. As always, we had about one third of the team stepping down, and had them replaced with new ones. Following the change implemented last year, we continue to run the editorial process in a way that involves the Associate Editors more in editorial decisions. This involves asking them for feedback on close-call decisions, on desk rejections, and on appeals. Finally, we continue to rely heavily on Jaclyn Einstein (Managing Editor), Jan Sokolowsky (Advisory Editor), and Scott Guernsey (Advisory Editor), in their diligent work preparing manuscripts for processing and providing background information. 3.3 Key Statistics on Submissions, Editorial Decisions, and Impact Figure 1 presents the evolution of submissions to the RFS over the last few years. In the figure, only submissions received via the Editorial Express system are counted. Between May 7, 2019 and May 7, 2020, we had 1,388 new submissions and 303 resubmissions in the system, bringing the total to 1,691. This presents growth of 3.6% in new submissions. If we add the 483 submissions received via the dual submission process, which were not invited to be formally submitted in the Editorial Express system, we get a total number of submissions of 2,174. Figure 1 Open in new tabDownload slide RFS submissions Figure 1 Open in new tabDownload slide RFS submissions Even without dual submissions (which might add noise to total numbers), our submission numbers are higher than those in the other top-three finance journals. From recent public records, the Journal of Finance (JF) receives 1,211 total submissions a year and the Journal of Financial Economics (JFE) receives 1,593 total submissions a year, which are both below our 1,691. Figure 2 presents key statistics on the speed and efficiency of our process. Of course, with such volume of submissions, it is a challenge to keep the process as efficient, but we keep this as a high priority. The median turnaround time we had this year has decreased to 45 days (based on public records, it is higher than JFE at 28 days, but lower than JF at 48 days). Our average turnaround time is 55 days. For the number of late decisions, which we define as decisions taking over 120 days, we saw a significant decrease relative to last year to 31, which is about 1.8% of our total flow. Figure 2 Open in new tabDownload slide RFS turnaround statistics Figure 2 Open in new tabDownload slide RFS turnaround statistics Figure 3 presents information about two types of editorial decisions: the acceptance rate and the desk rejection rate. The acceptance rate in the figure is out of the new submissions in the system and it reached 9.73% this past year, which is still high in perspective of recent years. However, given that dual submissions that make it to the system are those that have been positively pre-screened, this rate is not indicative of the unconditional chance that a paper ends up being accepted. For this, the rate out of total new submissions including dual submissions not in the system is a better indicator, and it has been at 7.21% this past year. Still, the optimistic message is that the RFS is accepting more papers than in the past; a total of 135 papers were accepted between May 2019 and May 2020. Given the growth in the profession, we think it is important not to be stagnant with the number of published papers, as long as standards are not compromised. The desk rejection rate in the last year was 17.36%, which is higher than the previous year. Figure 3 Open in new tabDownload slide RFS editorial decisions Figure 3 Open in new tabDownload slide RFS editorial decisions Finally, Figure 4 presents information about the impact factor of RFS. The 2018 number showed an increase in the two-year impact factor to 4.975, significantly higher than every year in the last five years. The numbers for JF and JFE for 2018 were 6.201 and 4.693, respectively. The five-year impact factor for the RFS (not shown in the figure) has also climbed and is now at 6.663. Figure 4 Open in new tabDownload slide RFS impact factor Figure 4 Open in new tabDownload slide RFS impact factor Figure 5 Open in new tabDownload slide Total submissions to large finance conferences Figure 5 Open in new tabDownload slide Total submissions to large finance conferences Figure 6 Open in new tabDownload slide Paper acceptance rates at large finance conferences Figure 6 Open in new tabDownload slide Paper acceptance rates at large finance conferences 3.4 Editorial Initiatives and Other News The most significant policy development of the last year is the approval of a code sharing policy, which went into effect on July 1, 2020. The policy requires authors of accepted papers to make their code available publicly. We think that this is an important step for the standards of publications at the RFS and in the finance profession more generally. At this point, we do not require data sharing, which is more complicated, but rather just encourage it. If authors do not share the data, they have to provide pseudo data to demonstrate how the code works. Full details of the policy are available on our website. The RFS continues to sponsor dual submission conferences. The demand for such sponsorships from various conferences has grown a lot in recent years and the RFS needs to be selective and focus attention on those that present the best fit. One direction here is to focus on advancing unique topics with potential for special issues or half special issues. This goes to reinforce the position RFS takes in attempting to promote new directions and topics of research. A few such recent and forthcoming conferences are: (1) FinTech, joint with Georgia State, sponsored by Itay Goldstein and Manju Puri, February 2020; (2) Big Data, joint with NBER, sponsored by Itay Goldstein, December 2020; (3) Private-Value Assets, joint with Yale, sponsored by Stijn van Nieuwerburgh, January 2020; and (4) Insurance, joint with NBER, sponsored by Ralph Koijen, March 2020. In addition, we continue collaborations with older conference-series, such as Miami Behavioral Finance (sponsored by Lauren Cohen) and Texas Finance Festival (sponsored by Itay Goldstein and Holger Mueller). 4. 2019 SFS Cavalcade Asia-Pacific, by Kalok Chan, Calvalcade Chair The 2019 SFS Cavalcade Asia-Pacific conference was held in Hong Kong from December 6-8, and the University of Hong Kong (HKU) was the host university. The success of this conference benefited from the help of many people, including from the SFS Jaclyn Einstein and Leigh Ann Clark, as well as the advice and support of SFS officers Laura Starks and Craig Holden. The Host Faculty Sponsor was Dragon Tang (HKU), who worked tirelessly with his supporting staff Fanny Yeung and Laurie Tang to organize the conference. As Program Chair, I also benefited greatly from the frequent advice and support of the Vice Chair, Jun-Koo Kang (NTU), and last year’s Program Chair, Ron Masulis (UNSW). The 2019 SFS Cavalcade Asia-Pacific received 367 submissions, 34 of which were student submissions. 12 submissions (4 student submissions) were dual submissions with the Review of Asset Pricing Studies, and 12 submissions (7 student submissions) were dual submissions with the Review of Corporate Finance Studies. The conference accepted 60 papers, implying an overall acceptance rate of 16.3%. In comparison, the 2018 conference received 511 submissions (59 papers accepted) and the 2017 conference received 387 submission (52 papers accepted). The conference review process involved 112 reviewers with an average of 7 papers per reviewer. The majority of reviewers returned reviews on schedule with a few reviewers delaying the review process by two weeks. The average score for all submitted papers was 6.3. The average score for accepted papers was 8.5. There were 20 sessions and each session consisted of 3 papers for a total of 60 papers on the program. It was quite a challenge organizing the 2019 conference, due to social unrest in Hong Kong since June. This has affected the number of submissions and registered participants. But the conference was held successfully in the executive teaching facilities of HKU Business School in Cyberport (off the main campus) from Friday morning until Sunday noon (i.e, the conference was 2.5 days long). Some presenters were unable to attend, and seven papers were presented via Skype, but it all worked well. The conference was well attended; some rooms were full in the first two days. We did encounter some mild drop-off in attendance on the last day. Listed below is the number of submissions by category, where some papers chose 2 or more categories: Asset Pricing (Empirical): 121 Asset Pricing (Theory): 25 Banking/Financial Intermediation (Empirical): 63 Banking/Financial Intermediation (Theory): 14 Behavioral (Corporate): 14 Behavioral (Investments): 52 Corporate (Empirical): 115 Corporate (Theory): 15 Derivatives: 21 Fixed Income Securities: 25 Governance/Corporate Control: 39 Information and Securities Markets / Market Microstructure: 51 Money Management: 22 Other: 25 The conference gave out three best paper awards: – Best Paper in Corporate Finance: “Freeze! Financial Sanctions and Bank Responses” by Matthias Efing, Stefan Goldbach, Volker Nitsch – Arthur Warga Award for the Best Paper in Fixed Income: “How Safe Are Safe Havens” by Sven Klingler and Suresh Sundaresan – Best Paper in Asset Pricing: “Expectations in the Cross Section: Stock Price Reactions to the Information and Bias in Analyst-Expected Returns” by Johnathan Loudis. I am honored to have been the keynote speaker for the conference with the topic on Mainland-Hong Kong Stock Connect. I would like to express my sincere gratitude to Dragon Tang and his administrative staff, who have done a remarkable job in organizing the conference despite the challenges encountered. 5. 2020 SFS Cavalcade North America, by Monica Piazzesi, Cavalcade Chair I would like to acknowledge the invaluable help of many people who contributed to the success of the SFS Cavalcade North America. In particular the event organizers: from the SFS, Jaclyn Einstein, and from Indiana University, Craig Holden, Pam Potter, Zach Watt, and the finance faculty who served as Kelley Faculty Hosts in the sessions. I also would like to thank my co-chairs, Ulrike Malmendier and Andrea Eisfeldt, and the SFS Advisory Chair Josef Zechner, and the support from the SFS board and editors, especially Laura Starks. 5.1 Virtual Conference The Cavalcade was scheduled to be held in-person at the UNC Kenan-Flagler Business School. When COVID-19 hit, it became impossible to hold the conference in-person. Instead of canceling the Cavalcade, the Indiana University Kelley School of Business offered to serve as virtual host and SFS accepted the offer. The SFS Cavalcade North America, which was held May 25-28, 2020, was the first large-scale (135 papers on the program) finance conference to be held virtually! Since the usual expenses of a physical conference (food, drink, receptions, meeting rooms, ground transportation, etc.) did not have to be borne, conference registration was offered free to anyone, anywhere in the world, who could be verified as being a faculty member, doctoral student, or otherwise legitimate finance researcher. As a result, more than 2,000 people from 44 countries registered for the conference. 47.5% of the registrants live outside of the US. This was truly a global conference. A large number of doctoral students registered (670). Virtual conferences allow doctoral students to expand the scope of their learning to include a wide variety of the profession’s best researchers. The average number of participants in the research paper sessions was 48.5. Since there were nine parallel sessions, the average number of conference participants at any one time was 436.8. This is far more participation than past Cavalcade conferences. Most three-day conferences have a steep drop-off on the third day as people head to the airport. The average number of conference participants on day three only declined moderately (397.0 on day three vs. 449.0 on day one and 464.4 on day two). 5.2 Conference Statistics The total submissions last year were 1,221 as shown in Figure 5. We accepted 135 papers in 9 parallel sessions, which kept the SFS Cavalcade at the same size as the prior year. The overall acceptance rate is 11%, which is in line with most of the other major finance conferences, like AFA and EFA, as shown in Figure 6. Only the WFA has a lower acceptance rate at about 7%. 5.3 Review Process To improve the speed of the review process and lower the burden on individual reviewers, we invited 300 reviewers. As a result, we ended up with an allocation of about 10 papers per reviewer. This seems to be an acceptable rate at the moment, but if submissions keep going up, we might have to expand the pool of reviewers further. Like in past years, we had a few issues with the timing of the reviews. A number of reviewers were very late with their reviews and some reviewers decide late in the review process that papers do not match them. 5.4 Composition of Submissions Many authors select several categories for their paper submissions. Some of our categories are more general (such as Empirical Investments or Corporate Finance Theory), while others are subfields of these general categories (such as Fixed Income or Banking Theory). Instead of presenting statistics about the various categories, we emphasize that the lion share of submissions went to the “Empirical” category of Banking, Behavioral Corporate Finance, Corporate Finance, Investments, Governance/Corporate Control, Household Finance, and Macro Finance. There were far fewer submissions to the “Theory” category. Interestingly, the acceptance rate of the “Theory” papers were higher across all categories. We conclude that while few theory papers were submitted, the quality of these submissions was high. 5.5 Suggestions for the Future Finally, we realized that sessions involve a significant time commitment. A session at the Cavalcade is a mini-conference that extends over the entire day. The day-long format makes it difficult to recruit session chairs. Moreover, each paper has an hour dedicated to itself. In the future, organizers should consider splitting sessions into half-days. Also, it would make sense to reduce the time per paper to 45 minutes or so. This suggestion will be particularly relevant if the next Cavalcade will still be online, but should also apply if we will be lucky to have our normal lives back and will be able to meet in person. The next SFS Cavalcade will be a virtual conference in May 2021 hosted by the MIT Golub Center for Finance and Policy. 6. SFS Financial and Policy Report, by Craig Holden, SFS Secretary-Treasurer The financial condition of SFS was strong already and got much stronger in 2019. Table 2 reports the SFS Balance Sheet as of the end of the year from 2016-2019. As of 12/31/2019, we have $7.9 million is assets and $0.7 million in liabilities for a surplus of $7.2 million. The Society has no debt. Our liabilities are exclusively banked referee fees that will be paid out to referees in the future. Table 2 SFS balance sheet 2016-2019 ASSETS . 12/31/2016 . 12/31/2017 . 12/31/2018 . 12/31/2019 . Bank Funds   Checking $184,123 $175,692 $200,275 $242,199   Savings $602,122 $0 $0 $0 Total Bank Funds $786,244 $175,692 $200,275 $242,199 Investments (at Market Value)*   Short-Term Treasury Index Fund $0 $599,057 $608,296 $632,761   US S&P 500 Stock Index Fund $1,824,521 $2,221,871 $2,122,648 $2,790,684   Developed Countries Stock Index Fund $1,468,928 $2,008,790 $1,736,869 $2,119,014   Emerging Countries Stock Index Fund $1,428,542 $2,079,341 $1,774,783 $2,098,887 Total Investments $4,721,992 $6,909,059 $6,242,596 $7,641,346 TOTAL ASSETS $5,508,236 $7,084,751 $6,442,871 $7,883,545 LIABILITIES (Banked Referee Fees) $454,160 $524,100 $596,580 $660,120 SURPLUS $5,054,076 $6,560,651 $5,846,291 $7,223,425 * Arthur Warga Endowment (Part of Invest.) $30,577 $35,666 $31,840 $40,399 ASSETS . 12/31/2016 . 12/31/2017 . 12/31/2018 . 12/31/2019 . Bank Funds   Checking $184,123 $175,692 $200,275 $242,199   Savings $602,122 $0 $0 $0 Total Bank Funds $786,244 $175,692 $200,275 $242,199 Investments (at Market Value)*   Short-Term Treasury Index Fund $0 $599,057 $608,296 $632,761   US S&P 500 Stock Index Fund $1,824,521 $2,221,871 $2,122,648 $2,790,684   Developed Countries Stock Index Fund $1,468,928 $2,008,790 $1,736,869 $2,119,014   Emerging Countries Stock Index Fund $1,428,542 $2,079,341 $1,774,783 $2,098,887 Total Investments $4,721,992 $6,909,059 $6,242,596 $7,641,346 TOTAL ASSETS $5,508,236 $7,084,751 $6,442,871 $7,883,545 LIABILITIES (Banked Referee Fees) $454,160 $524,100 $596,580 $660,120 SURPLUS $5,054,076 $6,560,651 $5,846,291 $7,223,425 * Arthur Warga Endowment (Part of Invest.) $30,577 $35,666 $31,840 $40,399 Open in new tab Table 2 SFS balance sheet 2016-2019 ASSETS . 12/31/2016 . 12/31/2017 . 12/31/2018 . 12/31/2019 . Bank Funds   Checking $184,123 $175,692 $200,275 $242,199   Savings $602,122 $0 $0 $0 Total Bank Funds $786,244 $175,692 $200,275 $242,199 Investments (at Market Value)*   Short-Term Treasury Index Fund $0 $599,057 $608,296 $632,761   US S&P 500 Stock Index Fund $1,824,521 $2,221,871 $2,122,648 $2,790,684   Developed Countries Stock Index Fund $1,468,928 $2,008,790 $1,736,869 $2,119,014   Emerging Countries Stock Index Fund $1,428,542 $2,079,341 $1,774,783 $2,098,887 Total Investments $4,721,992 $6,909,059 $6,242,596 $7,641,346 TOTAL ASSETS $5,508,236 $7,084,751 $6,442,871 $7,883,545 LIABILITIES (Banked Referee Fees) $454,160 $524,100 $596,580 $660,120 SURPLUS $5,054,076 $6,560,651 $5,846,291 $7,223,425 * Arthur Warga Endowment (Part of Invest.) $30,577 $35,666 $31,840 $40,399 ASSETS . 12/31/2016 . 12/31/2017 . 12/31/2018 . 12/31/2019 . Bank Funds   Checking $184,123 $175,692 $200,275 $242,199   Savings $602,122 $0 $0 $0 Total Bank Funds $786,244 $175,692 $200,275 $242,199 Investments (at Market Value)*   Short-Term Treasury Index Fund $0 $599,057 $608,296 $632,761   US S&P 500 Stock Index Fund $1,824,521 $2,221,871 $2,122,648 $2,790,684   Developed Countries Stock Index Fund $1,468,928 $2,008,790 $1,736,869 $2,119,014   Emerging Countries Stock Index Fund $1,428,542 $2,079,341 $1,774,783 $2,098,887 Total Investments $4,721,992 $6,909,059 $6,242,596 $7,641,346 TOTAL ASSETS $5,508,236 $7,084,751 $6,442,871 $7,883,545 LIABILITIES (Banked Referee Fees) $454,160 $524,100 $596,580 $660,120 SURPLUS $5,054,076 $6,560,651 $5,846,291 $7,223,425 * Arthur Warga Endowment (Part of Invest.) $30,577 $35,666 $31,840 $40,399 Open in new tab SFS has $7.6 million in investments. The SFS investment policy is to hold approximately $600K in a nearly risk-free asset (i.e., a short-term Treasury index fund) and put the rest in three low-fee, passive stock index funds to approximate the global stock portfolio. The Arthur Warga endowment fund, which supports the Arthur Warga Awards for the best paper in fixed income at our two SFS Cavalcade conferences, was worth $40,399 at the end of 2019. The endowment is invested in the same manner as our other investments and is part of the total investments reported above. Table 3 reports the SFS Income Statement for the calendar years from 2016-2019. The revenues and expenses are grouped into three broad activity categories: journals, Cavalcade conferences, and SFS support of conferences organized by others. In addition, the revenues include a separate line for gains or losses on our investments. For 2019, total revenue was $2,520K and total expense was $955K for a net income of $1,565K. All of the gain ($1,587K) came from gains on our investment portfolio. Essentially, 2019 was a good year for the global stock market. The drivers of our losses and gains are broken out in more detail in Table 4 and discussed further below. Table 3 SFS income statement 2016-2019 . 2016 . 2017 . 2018 . 2019 . REVENUE Journals   Submission Revenue $376,770 $381,567 $415,260 $403,580   Income from Oxford $442,204 $426,279 $410,964 $398,150   Journal-Hosted Conferences $0 $0 $5,000 $22,757 Total Journals $818,974 $807,846 $831,224 $824,487 Cavalcades   Cavalcade Submission $42,800 $61,758 $84,383 $61,145   Cavalcade Registration $38,255 $47,771 $47,107 $35,132 Total Cavalcades $81,055 $109,529 $131,490 $96,277 SFS Support $6,569 $22,766 $40,187 $12,782 Investment Gains $355,107 $1,334,223 ($666,466) $1,586,567 TOTAL REVENUE $1,261,705 $2,274,363 $336,435 $2,520,113 EXPENSES Journals   Paid Referee Fees $256,960 $271,380 $289,600 $282,360   Change in Banked Referee Fees $65,050 $69,940 $72,480 $63,540   Submission Refunds $16,233 $19,120 $18,678 $6,840   Merchant Service and Bank Fees $12,830 $11,435 $20,202 $20,379   Editorial Express $14,000 $14,000 $14,000 $15,000   Journal Professional Fees $133,141 $183,273 $267,169 $190,138   Payroll IRS/NC/VA Payments $53,756 $51,718 $60,681 $58,505   Copy Editor fees $30,943 $48,790 $46,961 $66,525   Journal Award Amounts $53,000 $51,000 $79,667 $66,333   Journal Award Plaques and T-shirts $10,339 $5,896 $5,700 $7,395   Council and Editors Dinner and Misc. $9,724 $12,594 $2,020 $7,993   Journal-Hosted Conferences $0 $5,000 $63,446 $73,665 Total Journals $655,975 $744,146 $940,603 $858,673 Cavalcades   Cavalcade Submission Software $0 $3,451 $3,211 $4,489   Cavalcade Professional Fees $0 $19,971 $5,500 $15,840   Cavalcade Food and Transportation $21,348 $22,729 $41,595 $0   Cavalcade Travel $2,600 $5,078 $10,417 $18,277   Cavalcade Best Paper Awards $2,700 $3,300 $3,403 $3,725   Cavalcade Misc. Expenses $12,670 $14,056 $8,402 $29,646 Total Cavalcades $39,318 $68,585 $72,528 $71,977 SFS Support   Support of Other Conferences $37,191 $36,060 $9,737 $4,318   Misc. Support Expenses $10,960 $8,882 $28,807 $20,275 Total SFS Support $48,150 $44,942 $38,543 $24,593 TOTAL EXPENSES $743,444 $857,674 $1,051,673 $955,243 NET INCOME $518,261 $1,416,690 ($715,238) $1,564,871 . 2016 . 2017 . 2018 . 2019 . REVENUE Journals   Submission Revenue $376,770 $381,567 $415,260 $403,580   Income from Oxford $442,204 $426,279 $410,964 $398,150   Journal-Hosted Conferences $0 $0 $5,000 $22,757 Total Journals $818,974 $807,846 $831,224 $824,487 Cavalcades   Cavalcade Submission $42,800 $61,758 $84,383 $61,145   Cavalcade Registration $38,255 $47,771 $47,107 $35,132 Total Cavalcades $81,055 $109,529 $131,490 $96,277 SFS Support $6,569 $22,766 $40,187 $12,782 Investment Gains $355,107 $1,334,223 ($666,466) $1,586,567 TOTAL REVENUE $1,261,705 $2,274,363 $336,435 $2,520,113 EXPENSES Journals   Paid Referee Fees $256,960 $271,380 $289,600 $282,360   Change in Banked Referee Fees $65,050 $69,940 $72,480 $63,540   Submission Refunds $16,233 $19,120 $18,678 $6,840   Merchant Service and Bank Fees $12,830 $11,435 $20,202 $20,379   Editorial Express $14,000 $14,000 $14,000 $15,000   Journal Professional Fees $133,141 $183,273 $267,169 $190,138   Payroll IRS/NC/VA Payments $53,756 $51,718 $60,681 $58,505   Copy Editor fees $30,943 $48,790 $46,961 $66,525   Journal Award Amounts $53,000 $51,000 $79,667 $66,333   Journal Award Plaques and T-shirts $10,339 $5,896 $5,700 $7,395   Council and Editors Dinner and Misc. $9,724 $12,594 $2,020 $7,993   Journal-Hosted Conferences $0 $5,000 $63,446 $73,665 Total Journals $655,975 $744,146 $940,603 $858,673 Cavalcades   Cavalcade Submission Software $0 $3,451 $3,211 $4,489   Cavalcade Professional Fees $0 $19,971 $5,500 $15,840   Cavalcade Food and Transportation $21,348 $22,729 $41,595 $0   Cavalcade Travel $2,600 $5,078 $10,417 $18,277   Cavalcade Best Paper Awards $2,700 $3,300 $3,403 $3,725   Cavalcade Misc. Expenses $12,670 $14,056 $8,402 $29,646 Total Cavalcades $39,318 $68,585 $72,528 $71,977 SFS Support   Support of Other Conferences $37,191 $36,060 $9,737 $4,318   Misc. Support Expenses $10,960 $8,882 $28,807 $20,275 Total SFS Support $48,150 $44,942 $38,543 $24,593 TOTAL EXPENSES $743,444 $857,674 $1,051,673 $955,243 NET INCOME $518,261 $1,416,690 ($715,238) $1,564,871 Open in new tab Table 3 SFS income statement 2016-2019 . 2016 . 2017 . 2018 . 2019 . REVENUE Journals   Submission Revenue $376,770 $381,567 $415,260 $403,580   Income from Oxford $442,204 $426,279 $410,964 $398,150   Journal-Hosted Conferences $0 $0 $5,000 $22,757 Total Journals $818,974 $807,846 $831,224 $824,487 Cavalcades   Cavalcade Submission $42,800 $61,758 $84,383 $61,145   Cavalcade Registration $38,255 $47,771 $47,107 $35,132 Total Cavalcades $81,055 $109,529 $131,490 $96,277 SFS Support $6,569 $22,766 $40,187 $12,782 Investment Gains $355,107 $1,334,223 ($666,466) $1,586,567 TOTAL REVENUE $1,261,705 $2,274,363 $336,435 $2,520,113 EXPENSES Journals   Paid Referee Fees $256,960 $271,380 $289,600 $282,360   Change in Banked Referee Fees $65,050 $69,940 $72,480 $63,540   Submission Refunds $16,233 $19,120 $18,678 $6,840   Merchant Service and Bank Fees $12,830 $11,435 $20,202 $20,379   Editorial Express $14,000 $14,000 $14,000 $15,000   Journal Professional Fees $133,141 $183,273 $267,169 $190,138   Payroll IRS/NC/VA Payments $53,756 $51,718 $60,681 $58,505   Copy Editor fees $30,943 $48,790 $46,961 $66,525   Journal Award Amounts $53,000 $51,000 $79,667 $66,333   Journal Award Plaques and T-shirts $10,339 $5,896 $5,700 $7,395   Council and Editors Dinner and Misc. $9,724 $12,594 $2,020 $7,993   Journal-Hosted Conferences $0 $5,000 $63,446 $73,665 Total Journals $655,975 $744,146 $940,603 $858,673 Cavalcades   Cavalcade Submission Software $0 $3,451 $3,211 $4,489   Cavalcade Professional Fees $0 $19,971 $5,500 $15,840   Cavalcade Food and Transportation $21,348 $22,729 $41,595 $0   Cavalcade Travel $2,600 $5,078 $10,417 $18,277   Cavalcade Best Paper Awards $2,700 $3,300 $3,403 $3,725   Cavalcade Misc. Expenses $12,670 $14,056 $8,402 $29,646 Total Cavalcades $39,318 $68,585 $72,528 $71,977 SFS Support   Support of Other Conferences $37,191 $36,060 $9,737 $4,318   Misc. Support Expenses $10,960 $8,882 $28,807 $20,275 Total SFS Support $48,150 $44,942 $38,543 $24,593 TOTAL EXPENSES $743,444 $857,674 $1,051,673 $955,243 NET INCOME $518,261 $1,416,690 ($715,238) $1,564,871 . 2016 . 2017 . 2018 . 2019 . REVENUE Journals   Submission Revenue $376,770 $381,567 $415,260 $403,580   Income from Oxford $442,204 $426,279 $410,964 $398,150   Journal-Hosted Conferences $0 $0 $5,000 $22,757 Total Journals $818,974 $807,846 $831,224 $824,487 Cavalcades   Cavalcade Submission $42,800 $61,758 $84,383 $61,145   Cavalcade Registration $38,255 $47,771 $47,107 $35,132 Total Cavalcades $81,055 $109,529 $131,490 $96,277 SFS Support $6,569 $22,766 $40,187 $12,782 Investment Gains $355,107 $1,334,223 ($666,466) $1,586,567 TOTAL REVENUE $1,261,705 $2,274,363 $336,435 $2,520,113 EXPENSES Journals   Paid Referee Fees $256,960 $271,380 $289,600 $282,360   Change in Banked Referee Fees $65,050 $69,940 $72,480 $63,540   Submission Refunds $16,233 $19,120 $18,678 $6,840   Merchant Service and Bank Fees $12,830 $11,435 $20,202 $20,379   Editorial Express $14,000 $14,000 $14,000 $15,000   Journal Professional Fees $133,141 $183,273 $267,169 $190,138   Payroll IRS/NC/VA Payments $53,756 $51,718 $60,681 $58,505   Copy Editor fees $30,943 $48,790 $46,961 $66,525   Journal Award Amounts $53,000 $51,000 $79,667 $66,333   Journal Award Plaques and T-shirts $10,339 $5,896 $5,700 $7,395   Council and Editors Dinner and Misc. $9,724 $12,594 $2,020 $7,993   Journal-Hosted Conferences $0 $5,000 $63,446 $73,665 Total Journals $655,975 $744,146 $940,603 $858,673 Cavalcades   Cavalcade Submission Software $0 $3,451 $3,211 $4,489   Cavalcade Professional Fees $0 $19,971 $5,500 $15,840   Cavalcade Food and Transportation $21,348 $22,729 $41,595 $0   Cavalcade Travel $2,600 $5,078 $10,417 $18,277   Cavalcade Best Paper Awards $2,700 $3,300 $3,403 $3,725   Cavalcade Misc. Expenses $12,670 $14,056 $8,402 $29,646 Total Cavalcades $39,318 $68,585 $72,528 $71,977 SFS Support   Support of Other Conferences $37,191 $36,060 $9,737 $4,318   Misc. Support Expenses $10,960 $8,882 $28,807 $20,275 Total SFS Support $48,150 $44,942 $38,543 $24,593 TOTAL EXPENSES $743,444 $857,674 $1,051,673 $955,243 NET INCOME $518,261 $1,416,690 ($715,238) $1,564,871 Open in new tab Table 4 SFS income by activity 2016-2019 PROFIT BY ACTIVITY . 2016 . 2017 . 2018 . 2019 . Journal Profit $162,999 $63,700 ($109,379) ($34,185) Cavalcades Profit $41,737 $40,943 $58,963 $24,300 SFS Support Profit ($41,581) ($22,176) $1,644 ($11,811) Operating Income $163,154 $82,466 ($48,772) ($21,696) Investment Gains $355,107 $1,334,223 ($666,466) $1,586,567 NET INCOME $518,261 $1,416,690 ($715,238) $1,564,871 PROFIT BY ACTIVITY . 2016 . 2017 . 2018 . 2019 . Journal Profit $162,999 $63,700 ($109,379) ($34,185) Cavalcades Profit $41,737 $40,943 $58,963 $24,300 SFS Support Profit ($41,581) ($22,176) $1,644 ($11,811) Operating Income $163,154 $82,466 ($48,772) ($21,696) Investment Gains $355,107 $1,334,223 ($666,466) $1,586,567 NET INCOME $518,261 $1,416,690 ($715,238) $1,564,871 Open in new tab Table 4 SFS income by activity 2016-2019 PROFIT BY ACTIVITY . 2016 . 2017 . 2018 . 2019 . Journal Profit $162,999 $63,700 ($109,379) ($34,185) Cavalcades Profit $41,737 $40,943 $58,963 $24,300 SFS Support Profit ($41,581) ($22,176) $1,644 ($11,811) Operating Income $163,154 $82,466 ($48,772) ($21,696) Investment Gains $355,107 $1,334,223 ($666,466) $1,586,567 NET INCOME $518,261 $1,416,690 ($715,238) $1,564,871 PROFIT BY ACTIVITY . 2016 . 2017 . 2018 . 2019 . Journal Profit $162,999 $63,700 ($109,379) ($34,185) Cavalcades Profit $41,737 $40,943 $58,963 $24,300 SFS Support Profit ($41,581) ($22,176) $1,644 ($11,811) Operating Income $163,154 $82,466 ($48,772) ($21,696) Investment Gains $355,107 $1,334,223 ($666,466) $1,586,567 NET INCOME $518,261 $1,416,690 ($715,238) $1,564,871 Open in new tab Table 4 breaks out SFS income by activity for the calendar years 2016-2019. In 2019, we lost $34K on our three journals (RAPS, RCFS, and RFS), made $24K on our two Cavalcade conferences (Asia-Pacific and North America), and lost $12K on SFS support for an operating loss of $22K. And as previously mentioned, we made $1,587K on our investments. The four-year, time-series of investment gains show significant volatility over time, as we would expect based upon our investment in risky assets, but the long-run average is strongly positive. The Cavalcade conferences have made a small positive profit every year, which is consistent with the SFS Council policy that they at least be self-supporting. The SFS support category is generally expected to be negative because we give away money to help support worthwhile conferences organized by others. In 2018, this category was positive based on our success in obtaining donations. This brings us to the journal category. In the past, we have consistently made $150K to $200K income on our top-tier journals. Journal profit dropped to $64K in 2017 and dropped further to a loss of $109K in 2018. This decline in journal profit was primary driven by six independent decisions (described in more detail last year’s annual report), each of which was a rational and sensible decision by itself, but each of which added cost to running our journals. To bring our journals out of the red, the SFS Council decided to make two adjustments going forward: (1) the new journal-hosted conferences for RAPS and RCFS will charge submission and registration fees with the aim that the conferences will become self-supporting and (2) lower some of the journal award amounts. As a result, our journal losses were reduced by $75K in 2019. Due to oddities of how our SFS Winter Conference revenues and expenses split across the calendar years, I expect the journal losses to go even lower in 2020 and may even get back to being positive. Table 5 reports the returns of the underlying SFS investments over the calendar years 2016-2019. All three passive stock index funds had positive capital gain returns in 2019. Specifically, the US S&P 500 index fund return was 28.61%, the Developed Countries stock index fund return was 18.18%, and the Emerging Countries stock index fund return was 15.09%. The average dividend yield across all three was 2.99%. The Short-Term Treasury index fund return was 2.33%. The average expense fee on our three passive, stock index funds was 4.2 basis points. Table 5 Returns of the underlying SFS investments (2016-2019) . 2016 . 2017 . 2018 . 2019 . Expense Fee . 10 Year Return . Capital Gain Returns  US S&P 500 Stock Index Fund (FXAIX) 9.11% 19.29% −6.80% 28.61% 1.5 Bpts 11.68%  Developed Countries Stock Index (FSPSX) −1.70% 22.25% −15.82% 18.18% 3.5 Bpts 3.70%  Emerging Countries Stock Index (FPADX) 9.59% 34.87% −16.39% 15.09% 7.6 Bpts 0.95%  Portfolio Average (1/3 weight in each) 5.67% 25.47% −13.00% 20.63% 4.2 Bpts 5.44% Dividend Yield 2.44% 2.63% 1.68% 2.99% Short-Term Treasury Index Fund (FUMBX) 0.87% 0.67% 1.47% 2.33% 3.0 Bpts 1.90% . 2016 . 2017 . 2018 . 2019 . Expense Fee . 10 Year Return . Capital Gain Returns  US S&P 500 Stock Index Fund (FXAIX) 9.11% 19.29% −6.80% 28.61% 1.5 Bpts 11.68%  Developed Countries Stock Index (FSPSX) −1.70% 22.25% −15.82% 18.18% 3.5 Bpts 3.70%  Emerging Countries Stock Index (FPADX) 9.59% 34.87% −16.39% 15.09% 7.6 Bpts 0.95%  Portfolio Average (1/3 weight in each) 5.67% 25.47% −13.00% 20.63% 4.2 Bpts 5.44% Dividend Yield 2.44% 2.63% 1.68% 2.99% Short-Term Treasury Index Fund (FUMBX) 0.87% 0.67% 1.47% 2.33% 3.0 Bpts 1.90% Open in new tab Table 5 Returns of the underlying SFS investments (2016-2019) . 2016 . 2017 . 2018 . 2019 . Expense Fee . 10 Year Return . Capital Gain Returns  US S&P 500 Stock Index Fund (FXAIX) 9.11% 19.29% −6.80% 28.61% 1.5 Bpts 11.68%  Developed Countries Stock Index (FSPSX) −1.70% 22.25% −15.82% 18.18% 3.5 Bpts 3.70%  Emerging Countries Stock Index (FPADX) 9.59% 34.87% −16.39% 15.09% 7.6 Bpts 0.95%  Portfolio Average (1/3 weight in each) 5.67% 25.47% −13.00% 20.63% 4.2 Bpts 5.44% Dividend Yield 2.44% 2.63% 1.68% 2.99% Short-Term Treasury Index Fund (FUMBX) 0.87% 0.67% 1.47% 2.33% 3.0 Bpts 1.90% . 2016 . 2017 . 2018 . 2019 . Expense Fee . 10 Year Return . Capital Gain Returns  US S&P 500 Stock Index Fund (FXAIX) 9.11% 19.29% −6.80% 28.61% 1.5 Bpts 11.68%  Developed Countries Stock Index (FSPSX) −1.70% 22.25% −15.82% 18.18% 3.5 Bpts 3.70%  Emerging Countries Stock Index (FPADX) 9.59% 34.87% −16.39% 15.09% 7.6 Bpts 0.95%  Portfolio Average (1/3 weight in each) 5.67% 25.47% −13.00% 20.63% 4.2 Bpts 5.44% Dividend Yield 2.44% 2.63% 1.68% 2.99% Short-Term Treasury Index Fund (FUMBX) 0.87% 0.67% 1.47% 2.33% 3.0 Bpts 1.90% Open in new tab Next, let me turn to policy. I am the SFS representative to our publisher, Oxford University Press, and in that role address a variety of policy issues. Perhaps you did a literature search recently and were quickly glancing through an SFS journal PDF paper on your computer screen when you encountered a landscape table that was displayed sideways (at a 90-degree angle). Yes, you could print the paper out, but it is faster and easier to turn your head 90 degrees and try to quickly interpret it that way. What a pain in the neck! Well, you won’t have that problem anymore. At our request, Oxford has rotated all landscape pages in PDF papers by 90 degrees so that they always display upright on the computer screen. What a concept! This change will not have any impact on the way that the PDF paper prints out. This 90-degree rotation for landscape pages has been implemented for the entire 30+ year archive of our three SFS journals and will be the default going forward. Enjoy the pain-free screen reading! The print versions of our journals have always had colorful cover pages in primary colors: blue for RFS, green for RAPS, and red for RCFS. However, the PDF version of our journal papers only have a small footnote at the bottom of the first page that tells you what journal the paper is from. We have now corrected this situation by adding colorful journal banners at the top of all journal papers going forward in time. Here is what they look like: Figure 7 plots personal “print and online” subscriptions (blue circles) to SFS journals and student “print and online” subscriptions (red squares) over time. Both type of subscriptions have steadily declining over the past 14 years. Projecting the trend forward, personal “print and online” subscriptions are forecast to hit near zero in 2021 and student “print and online” subscriptions are projected to hit zero even earlier. This is part of the general decline of print subscriptions, which is broad trend across all academic journals in all disciplines. Figure 7 Open in new tabDownload slide SFS individual “print and online” subscriptions over time Figure 7 Open in new tabDownload slide SFS individual “print and online” subscriptions over time Based on this trend, the SFS Council voted to eliminate both personal “print and online” subscriptions and student “print and online” subscriptions. This change has now gone into effect. So individuals are no longer able to buy a “print and online” subscription to SFS journals, but a personal “online only” subscription continues to be available. Figure 8 plots academic (i.e., university library) “print only” subscriptions (blue circles) and academic “print + online” subscriptions (red squares) over time. Like the individual subscription trend, both types of academic subscriptions involving print have steadily declined. Figure 8 Open in new tabDownload slide SFS academic subscribers over time Figure 8 Open in new tabDownload slide SFS academic subscribers over time Not show in Figure 8 are two other types of subscriptions: (1) academic “online only” subscriptions and (2) academic consortia “online only” subscriptions. Academic consortia subscriptions involve custom deals negotiated by multiple universities and so there are no unit quantities for this category. Both categories have grown rapidly over time and now represent the large majority of our subscription income. Figure 9 compares SFS incremental profit WITH print (red circles) versus SFS incremental profit WITHOUT print subscriptions (blue squares). The WITHOUT print scenario assumes that: (1) 95% of print and online academic subscribers will switch to online-only subscriptions, (2) 60% of print only academic subscribers will switch to online-only subscriptions, and (3) print production expenses (which involve relatively large fixed costs) will be avoided. The graph shows that incremental profit WITH print will go negative by 2023. However, long before that point, the graph shows incremental profit WITHOUT print is greater than incremental profit WITH print starting in 2020. I anticipate that SFS will vote to discontinue all print subscriptions soon. Figure 9 Open in new tabDownload slide Incremental profit with and without print Figure 9 Open in new tabDownload slide Incremental profit with and without print 7. Acknowledgements There are many people who contributed their time and efforts make SFS run smoothly. We acknowledge and thank the 2019-2020 members of the SFS Council, who hail from across the globe: President Laura Starks, University of Texas at Austin Vice President Josef Zechner, Vienna University of Economics and Business Secretary-Treasurer Craig W. Holden, Indiana University Council Chair Raman Uppal, EDHEC Business School Renee Adams, University of Oxford Alon Brav, Duke University Allaudeen Hameed, National University of Singapore Kai Li, UBC Sauder School of Business Tarun Ramadorai, Imperial College London Karin Thorburn, Norwegian School of Economics. We acknowledge and thank the 2019-2020 SFS staff: Jaclyn Einstein, Managing Director and Editor Jan Sokolowsky, Advisory Editor Scott Guernsey, Advisory Editor Xin Fan, Advisory Editor. Leigh Ann Clark, Cavalcade Organizer. © The Author(s) 2021. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For permissions, please email: journals.permissions@oup.com This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/open_access/funder_policies/chorus/standard_publication_model)

Journal

The Review of Asset Pricing Studies – Oxford University Press

Published: May 21, 2021

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