Factor investing – the investment strategy that aims to capture 'hidden' returns in financial markets – is rapidly gaining in popularity. However, it is important to follow the right factors, and to be wary of one factor counteracting another, to get the best results. Otherwise, investors might follow generic factor strategies that expose them to risks that are not properly rewarded, resulting in inferior performance.
Since 2005, the Robeco Quantitative Research team has concentrated on analyzing, evaluating, and designing factor strategies that deliver more stable and consistent returns in the long run. We have long believed in the benefits of the evidence-based approach that true factor investing requires. Based on this philosophy, we have been able to give our clients access to portfolios with systematic exposure to a range of factor premiums for well over a decade. It has created a mini-industry within asset management that has won many converts.
Now it is time to take stock of how factor investing is being used, and sometimes, misused. Although some investors are already actively using factor investing strategies, others are still pondering whether they should use multiple factors across all their portfolios. Their more wary approach is justified as factor investing is not a one-size-fits-all investment phenomenon.
A strategic allocation to factor premiums is not only dependent on our evidence-based investment philosophy, but also on a careful assessment of a client’s specific needs. In some cases, fund solutions or tailored mandates may not always be the best structures to meet these needs.
In this publication, we address these challenges by looking at the lessons learned from our experiences with clients who have incorporated factor investing into their portfolio allocation strategies. We present three case studies of professional investors who are successfully implementing bespoke multi-factor solutions – a Dutch pension fund, a large sovereign wealth fund and a retail bank. These clients’ bespoke multi-factor solutions offer valuable insights for all.
This report is not available for users from countries where the offering of foreign financial services is not permitted, such as US Persons.
Your details are not shared with third parties. This information is exclusively intended for professional investors. All requests are checked.
The content displayed on this website is exclusively directed at qualified investors, as defined in the swiss collective investment schemes act of 23 june 2006 ("cisa") and its implementing ordinance, or at “independent asset managers” which meet additional requirements as set out below. Qualified investors are in particular regulated financial intermediaries such as banks, securities dealers, fund management companies and asset managers of collective investment schemes and central banks, regulated insurance companies, public entities and retirement benefits institutions with professional treasury or companies with professional treasury.
The contents, however, are not intended for non-qualified investors. By clicking "I agree" below, you confirm and acknowledge that you act in your capacity as qualified investor pursuant to CISA or as an “independent asset manager” who meets the additional requirements set out hereafter. In the event that you are an "independent asset manager" who meets all the requirements set out in Art. 3 para. 2 let. c) CISA in conjunction with Art. 3 CISO, by clicking "I Agree" below you confirm that you will use the content of this website only for those of your clients which are qualified investors pursuant to CISA.
Representative in Switzerland of the foreign funds registered with the Swiss Financial Market Supervisory Authority ("FINMA") for distribution in or from Switzerland to non-qualified investors is Robeco Switzerland AG, Josefstrasse 218, 8005 Zürich, and the paying agent is UBS Switzerland AG, Bahnhofstrasse 45, 8001 Zürich. Please consult www.finma.ch for a list of FINMA registered funds.
Neither information nor any opinion expressed on the website constitutes a solicitation, an offer or a recommendation to buy, sell or dispose of any investment, to engage in any other transaction or to provide any investment advice or service. An investment in a Robeco/Robeco Switzerland product should only be made after reading the related legal documents such as management regulations, articles of association, prospectuses, key investor information documents and annual and semi-annual reports, which can be all be obtained free of charge at this website, at the registered seat of the representative in Switzerland, as well as at the Robeco/Robeco Switzerland offices in each country where Robeco has a presence. In respect of the funds distributed in Switzerland, the place of performance and jurisdiction is the registered office of the representative in Switzerland.
This website is not directed to any person in any jurisdiction where, by reason of that person's nationality, residence or otherwise, the publication or availability of this website is prohibited. Persons in respect of whom such prohibitions apply must not access this website.