Factor investing at Invesco
Thought Leadership
Factor investing at Invesco
Your blueprint for better outcomes
With more than 30 years of factor investing experience, Invesco’s global factor teams and Asia-based practitioners create and implement customized factor portfolios in Asia Pacific and around the world. We manage US$115bn^ in assets in our innovative single and multi-asset factor portfolios that cover equities, fixed income, commodities, and ETFs, representing a third pillar of investing between traditional active and market cap weighted indexing.
We are focused on successful factor investing implementation from the start. Our team isolates portfolio characteristics to harvest factor premiums invested using a scalable and cost-efficient methodology. Our specialized and experienced research teams incorporate new techniques and capabilities as they develop and apply our integrated and proprietary risk controls when needed. We are committed to transparency and knowledge sharing. We collaborate with clients in our factor education programs and write and share white papers, articles and presentations in order to develop the next generation of factor investors.
^Source: Invesco, as at June, 30 2018.
Drive series featuring Stephen Quance, Director of Factor Investing, Asia Pacific
- single and multi-factor, customizable approaches that create diversification and focus on outperformance over time.
- our systematic process, that lends itself to risk control and attributions - increased control and transparency compared to traditional security selection.
- proprietary risk and return models, created to streamline the investment process and utilize the best academic research.
At Invesco, our factor investing approach incorporates sophisticated, scientific skills in risk premia, and strategic and tactical factor allocation including dynamic allocation of investment themes. We apply factor investing through:
Breakdown of factor investing by asset class*
- 2nd largest smart beta and 4th largest ETF provider globally
- 57 dedicated investment professionals in 10 global offices
- 8 fixed income self-indexing factor suite in 2018
- Factor-based active investing since 1983
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Quantitative Strategies (IQS)
*Source: Invesco, as at June, 30 2018.
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Exchange Traded Funds (ETFs)
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Fixed Income (IFI)
What is factor investing?
- Factors - such as value, quality and momentum - are quantifiable characteristics of a financial asset that meaningfully explain it's risk-return profile. Factor investing involves targeted exposure to a single factor or a combination of factors.
- Builds on exposures with historically successful characteristics, rather than on traditional securities selection.
- Enables investors to build efficient portfolios that balance risk, returns and costs to meet investment outcomes.
Factor investing is changing the investment management paradigm by allowing greater transparency and reducing the unknown.
Why factor investing now?
- We are experiencing a transition over time to a third pillar of investing and see this as a permanent advancement in investment management.
- In addition to returns generated from market beta and idiosyncratic alpha, the usage of factors can increasingly explain risk and return, allowing for greater granularity and customization.
- This transition is supported by decades of empirical research and is likely a permanent advancement in how assets are managed.
Thought leadership and education
We believe the more investors understand factor investing, the better able they will be to benefit from the approach. Therefore, we are committed to providing our clients with in-depth thought leadership and education on factor investing from our investment professionals.
Some of our recent whitepapers include:
A focus on education
We conduct a range of seminars, in-depth education and customized programs for our clients throughout the year, focused on providing the latest information and research to attendees.
We regularly hold events in major markets including China, Japan, Hong Kong, Singapore and Australia.
By partnering with academic institutions in Asia and Europe, we provide a complementary industry and implementation perspective.