Equity – Factor Investing
Philosophy
Academic research has shown that the behaviour of financial markets can be decomposed according to the characteristics of equity securities: behaviour over time, market capitalisation, volatility, valuation, etc.
These characteristics allow for risk premia capture to generate returns and are complementary to one another throughout the economic cycle.
The Equity Factor Investing strategy seeks to efficiently combine these characteristics with respect to a predefined relative risk budget (tracking error) compared with a benchmark index, with the objective of outperforming the reference markets over the long term.
Key Points
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A transparent investment solution
Performance factors are selected according to simple criteria: their ability to outperform over time compared with traditional indices and their complementary behavior throughout the cycle.
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Adaptable
An equity investment solution that adapts to different market configurations.
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Modular
A strategy that can be deployed over several geographical areas and adapted to different relative risk budgets.
Investment Strategy
The Equity Factor Investing strategy defines an exposure to equity markets through an active allocation based on single stock characteristics. The complementary nature of these characteristics aims to minimise risk by diversifying the portfolio allocation on preferred themes depending on the position in the economic cycle (growth, crisis, rebound).
Objective
To outperform its benchmark index over a recommended minimum investment period of 5 years, within a predefined annual ex-ante tracking-error target.
