What are the advantages of using factors to help implement ESG? Sample size: 94
Do you believe that factors can be used to address your portfolio's ESG objectives? Sample size: 2018 = 132, 2022 = 146
What are the challenges of implementing ESG with a factor approach? Sample size: 130
Equity factor faith rewarded: market turmoil highlights value of factors in managing risk
In our first theme, we focus on the performance of factors during recent market volatility and the impact that this had on investor sentiment. We find for many the volatile environment has demonstrated the strengths of a factor approach, with factor exposures now seen as fundamental in understanding the relative performance of portfolios.
End of the fixed income bull market sees investors looking to factors for new sources of return potential
In our third theme, we examine how and where factor investing is being used within fixed income. There are now high levels of belief in the application of factors within fixed income, and we find the potential end of the fixed income bull market has led to accelerating levels of demand for a factor approach. In particular, factors are seen helping to manage volatility and as an aid in delivering more diversified sources of return.
Accelerating rate of change in markets highlights the benefits of tactical tilting to a long-term, diversified multi-factor approach
In theme four, we explore approaches to implementation and find four-fifths of factor investors now adjust factor weights through time. This is driven by the varying performance of different factors over the economic cycle and desire to balance out exposures across the portfolio. We note many investors are using factor products both tactically and strategically and this differentiation plays an important role in product selection.
Invesco Global Factor Investing Study 2022
Understand the drivers of factor investing, investor experiences, and methods of implementation. Read the PDF now.
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Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice.
