australiaen
What is the best approach to factor investing?

What is the best approach to factor investing?

03-09-2013 | Insight

Factor investing is gaining ground. In a special whitepaper “an introduction to factor investing” Robeco explains what it is and how to set up your investment portfolios accordingly.

  • Joop Huij
    Joop
    Huij
    Portfolio Manager, Head of Factor Investing Equities and Factor Index Research

Factor investing is a new, alternative way of strategically allocating to the most attractive segments (factor premiums) of the market. In the case of equity investors, this could be, for instance, the low-volatility segment, the value segment or the momentum segment.

Furthermore, the whitepaper explains the specific use of academic insights in constructing investment portfolios. The strategy fits into Robeco’s approach to evidence-based investing.

A report commissioned by the Norwegian petroleum fund explicitly recommended factor investing. The researchers advised the fund to construct its investment portfolio in such a way that it is allocated towards factor premiums.

Stay informed on our latest insights with monthly mail updates
Stay informed on our latest insights with monthly mail updates
Subscribe
Subjects related to this article are:

Related articles

See all

Disclaimer

BY CLICKING ON “I AGREE”, I DECLARE I AM A WHOLESALE CLIENT AS DEFINED IN THE CORPORATIONS ACT 2001.

What is a Wholesale Client?
A person or entity is a “wholesale client” if they satisfy the requirements of section 761G of the Corporations Act.
This commonly includes a person or entity:

  • who holds an Australian Financial Services License
  • who has or controls at least $10 million (and may include funds held by an associate or under a trust that the person manages)
  • that is a body regulated by APRA other than a trustee of:
    (i) a superannuation fund;
    (ii) an approved deposit fund;
    (iii) a pooled superannuation trust; or
    (iv) a public sector superannuation scheme.
    within the meaning of the Superannuation Industry (Supervision) Act 1993
  • that is a body registered under the Financial Corporations Act 1974.
  • that is a trustee of:
    (i) a superannuation fund; or
    (ii) an approved deposit fund; or
    (iii) a pooled superannuation trust; or
    (iv) a public sector superannuation scheme
    within the meaning of the Superannuation Industry (Supervision) Act 1993 and the fund, trust or scheme has net assets of at least $10 million.
  • that is a listed entity or a related body corporate of a listed entity
  • that is an exempt public authority
  • that is a body corporate, or an unincorporated body, that:
    (i) carries on a business of investment in financial products, interests in land or other investments; and
    (ii) for those purposes, invests funds received (directly or indirectly) following an offer or invitation to the public, within the meaning of section 82 of the Corporations Act 2001, the terms of which provided for the funds subscribed to be invested for those purposes.
  • that is a foreign entity which, if established or incorporated in Australia, would be covered by one of the preceding paragraphs.
I Disagree