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Factor-tilt approach

A method of implementation where part of a portfolio is invested specifically in factor strategies.

Specific factors that may be under-represented in the 'standard' asset allocation are added in this approach using dedicated factor strategies.

Figure: Factor Tilts
Source: Koedijk, Slager, Stork: 'Factor Investing in Practice: A Trustees' Guide to Implementation' (2014).

Different approaches to implementing factor investing can be distinguished, such as the risk due diligence approach and factor optimization.

Quantitative investing: invisible layers surface to deliver attractive returns
Quantitative investing: invisible layers surface to deliver attractive returns
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Factoring carbon taxes into a Value strategy
Factoring carbon taxes into a Value strategy
Incorporating carbon taxes into a Value strategy at a stock level is equivalent to imposing carbon footprint constraints on the overall portfolio.
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Research on pre-1926 database reveals equity factors are ‘eternal’
New research reveals that equity factor styles have existed and persisted since the mid-19th century.
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Talk ‘22: ‘Staying the course is crucial’
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