Multi-Asset

Primer: the factor drivers of investment returns

Many of the concepts behind factor investing are nearly as old as investing itself. Much newer is the idea of bringing them together systematically.

02/06/2017

Many of the concepts behind factor investing are nearly as old as investing itself. Much newer is the idea of bringing them together systematically. This is transforming the way investors think of portfolio construction, and the reasons are clear: factor investing offers diversification, transparency and economy. We review the underlying concepts and show how they underpin a number of apparently disparate developments from smart beta to alternative risk premia. Factor investing provides important new tools for the investor, but, like all tools, having a firm understanding of their purpose remains critical to results.

The views and opinions contained herein are those of Schroders’ investment teams and/or Economics Group, and do not necessarily represent Schroder Investment Management North America Inc.’s house views. These views are subject to change. This information is intended to be for information purposes only and it is not intended as promotional material in any respect.