What is factor investing?
Factor Investing aims to offer investors a cost effective and transparent way to improve risk and return by capturing specific equity characteristics such as quality, low volatility, value and momentum.
Why consider factor investing?
We believe that factor investing is a more efficient way of accessing long-run equity returns than investing in a market-capitalisation weighted index. Factor investing can be efficient, cost effective and provides investors with diversified exposure to equity markets. Importantly, individual factors may offer different patterns of risk and return and, as such, investors can use factor investing to better target specific investment goals. Investors may choose to target just one factor or mix factors in a way that best matches their investment needs.
Our approach to factor investing
We have developed an advanced approach to Factor Investing that is anchored to company fundamentals. Our factors benefit from value-added proprietary data and incorporate controls which aim to reduce unnecessary investment risk.
We may offer our Advanced Factor capability for single factors (Low Volatility, Quality, Value or Momentum), or blended factor strategies aiming to meet specific investment needs:
This strategy aims to provide exposure to the Low Volatility and Quality factors and fully integrates ESG considerations. The result is a portfolio that seeks to provide superior, long-term equity returns but with lower total volatility than a standard market capitalization-weighted index. By design, we would expect this strategy to perform best during down markets while capturing equity returns in rising markets.
Our multi-factor strategy is a blend of our advanced Quality, Value and Momentum factors and like all strategies, is fully ESG integrated. The strategy aims to outperform the broader market in most market environments due to its exposure to a diversified range of factors.