Picto_Video Factor Investing

Theam quant funds

From single factors to market neutral solutions

What is Factor Investing?

Factor investing involves the selection of securities for investment according to particular, pre-identified risk factors. 

These factors have been found to explain the risk premiums that traditional fund managers have long sought to exploit. Such factors have been widely researched by academics and, depending on market conditions, have been found on the whole to behave with robust consistency. The low-volatility factor, for example, has been a notable subject of research since the 1970s.

Great success with investors

At the crossroads between the three major types of asset management (discretionary, passive and quantitative), factor investing offers efficient, transparent and systematic exposure to factors which have been found to drive market performance.

Which factors should investors focus on?

For us, there are four main factors which can be used when seeking to gain advantage from risk premiums in equity markets:

4Factors Factor Investing

Single factor investing

Operating in liquid European or US markets, our seven single-factor ETFs, launched in 2016 and 2017, enable more active managers to be invested in the factors they want to be exposed to and from which they wish to benefit. Due to their inner features, the strategies can be used as tactical allocations in line with the changes in market conditions that investors anticipate. For example, at the end of 2016, low-volatility ETF investors switched to a value ETF to benefit from the rising market.

For more details, please check the product pages which are accessible through the table at the bottom of this page.

Factor Investing Picture2

Multi-Factor investing

For investors who wish to combine the features of all equity factors, we created the DEFI (Diversified Equity Factor Investing) funds range. These funds maintain an equal risk allocation to each of the 4 core equity factors, in addition to beta and tracking error controls with respect to market cap indices.

DEFI is available in European, Eurozone, US and World versions.

Factor Investing Picture

Defensive Multi-Factor investing

Equity Factor Defensive combines a diversified investment into the main factors driving equity returns with a protection overlay.

The fund is a risk-balanced portfolio composed of four core equity factors – momentum, quality, low volatility and value  – aiming to provide capital growth by being exposed to a basket of equities and by implementing a systematic options strategy which aims at reducing risk by minimizing volatility.

This strategy is available in European, Eurozone and US versions.

 

Circle factor def Factor Investing

Market Neutral investing

Market Neutral factor investing

For the more directional risk averse profiles who seek stable returns in various market conditions, we created DEFI Market Neutral.

The objective of the fund is to increase the value of its assets over the medium term by being exposed to a leveraged long/short dynamic basket of equities and futures listed on worldwide markets or operating on these markets, the components of which are chosen using a systematic selection method based on a fundamental analysis of companies.

It takes a long exposure to the four core equity factors, as well as short positions in regional market indices (S&P 500, EURO STOXX 50 and Nikkei 225). The weights of each exposure are adjusted in order to neutralise the aggregate beta versus the MSCI World Index.

For more information, you can browse its dedicated website

Related posts

Related funds

Funds Investment theme Asset Class Style
THEAM Quant - Equity Europe DEFI Factor Investing Equities Benchmarked
THEAM Quant - Equity Eurozone DEFI Factor Investing Equities Benchmarked
THEAM Quant - Equity US DEFI Factor Investing Equities Benchmarked
THEAM Quant - Equity World DEFI Market Neutral Factor Investing Equities Benchmarked
BNP Paribas Easy ESG Dividend Europe ETF Factor Investing / SRI Equities Dividend
BNP Paribas Easy ESG Low Vol Europe ETF Factor Investing / SRI Equities Low Vol
BNP Paribas Easy ESG Low Vol US ETF Factor Investing / SRI Equities Low Vol
BNP Paribas Easy ESG Momentum Europe ETF Factor Investing / SRI Equities Momentum
BNP Paribas Easy ESG Quality Europe ETF Factor Investing / SRI Equities Quality
BNP Paribas Easy ESG Growth Europe ETF Factor Investing / SRI Equities Growth
BNP Paribas Easy ESG Value Europe ETF Factor Investing / SRI Equities Value
THEAM Quant - Equity Europe Factor Defensive Factor Investing / Defensive Strategies Equities Defensive
THEAM Quant - Equity Eurozone Factor Defensive Factor Investing / Defensive Strategies Equities Defensive
THEAM Quant - Equity US Factor Defensive Factor Investing / Defensive Strategies Equities Defensive
THEAM Quant - Equity World DEFI Liquid Alternatives/ Factor Investing Equities Market Neutral
THEAM Quant - Fixed Income Diversifier Factor Investing Fixed Income Absolute Return

Investments in the aforementioned fund are subject to market fluctuation and risks inherent in investing in securities. The value of investments and the revenue they generate can increase or decrease and it is possible that investors will not recover their initial investment. Source: BNP Paribas Asset Management Holding, registered with the Paris Registry of Commerce and Companies under number 682 001 904 as a Limited Company with share capital of 23 041 936 euros. Registered office: 1 Boulevard Haussmann, 75009 Paris. Postal address: TSA 47000/75318 PARIS CEDEX 09

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