Capabilities

Invesco Dynamic-Multifactor

Rotational strategy that seeks to anticipate changes in the business cycle and tilt toward factors expected to outperform in each market regime.

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Proprietary macro regime indicators

Forward-looking signals guide dynamic factor allocations given cyclical properties.

Systematic, transparent process

Rules-based investment process allows for transparency — no "black box" construction.

Cost-effective

Complementary to passive and active management, delivering an innovative and cost-effective solution in the marketplace.

Why consider Dynamic-Multifactor?

Invesco Dynamic-Multifactor Strategies seek to outperform the corresponding FTSE/Russell market-cap-weighted benchmark on a total-return and risk-adjusted basis while maintaining a comparable level of risk over a full market cycle.

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Ticker Fund Asset class Vehicle Download
IIMF
 Invesco International Developed Dynamic-Multifactor Index ETF International and global equity ETF Fact sheet
IUMF
 Invesco Russell 1000®  Dynamic-Multifactor Index ETF US equity ETF Fact sheet

Macro regime framework

Factors exhibit cyclicality and different exposures to economic risk. The framework will navigate market cycles, depending on each regime, for a tactical factor allocation approach.

This diagram shows the four distinct regime periods of recovery, expansion, slowdown, and contraction and which factor tilts correspond with each regime.

This graph demonstrates how the team defines the stages of the business cycle based on the expected level and change in economic growth and how we combine proprietary indicators to estimate one of four factor regimes: Recovery, expansion, slowdown, and contraction.

  Recovery Expansion Slowdown Contraction
Long-term economic growth trend Growth is below trend and accelerating Growth is above trend and accelerating Growth is above trend and decelerating Growth is below trend and decelerating 
Size x x    
Value x x    
Momentum   x   x
Low volatility     x x
Quality     x x

Factor cyclicality

  • Size and value tend to be cyclical, with higher operating leverage and more resilience on external funding.
  • Quality and low volatility tend to be defensive, with lower operating leverage and more reliance on internal cash flows.
  • Momentum is more transient and tends to perform well in later stages of cyclical upturns and downturns.

Our Philosophy

  1. Factor portfolios1 can outperform market-cap benchmarks in the long term by rewarding investors for fundamental and behavioral sources of risks.
  2. Factor returns are cyclical, exhibit low correlation to one another, and have potentially large performance dispersion, driven by changing macro and market conditions.
  3. Dynamic factor allocations seek to achieve better results by anticipating changes in the business cycle.

 

Why partner with Invesco?

Invesco Dynamic-Multifactor Strategies utilize the Invesco Solutions team’s proprietary research capabilities and is managed by our ETF and Indexed Strategies team, which oversees $470 billion across 400+ index-based solutions spanning asset classes, regions, sectors, and factors. Invesco Dynamic-Multifactor Strategies' rotational approach, proprietary indicators, style factors, and core exposure make it an appealing strategy.

Over a full market-cycle, Invesco Dynamic-Multifactor Strategies provide core exposure for its respective regions and market caps. Due to its rotational nature, Dynamic-Multifactor will often have tilts, resulting in the strategy not providing core exposure as of a single point in time. Our strategy has provided statistically significant exposure to each of the five factors over time, ensuring diversified, multi-factor exposure.

Invesco Dynamic-Multifactor Strategies use a rules-based framework to target exposure to five different factors. Invesco Funds use economic and market sentiment indicators to identify four regimes corresponding to different parts of the business cycle: recovery, expansion, slowdown, and contraction. Invesco's Dynamic-Multifactor Strategies emphasize exposure to these factors by allocating to one of four predetermined multifactor indexes, according to the Invesco economic regime signal. These multifactor indexes target a combination of factors that have historically outperformed other factors in these stages of the business cycle.

  • Relative to a single-factor approach, a multifactor strategy provides greater diversification, which can smooth investor returns and help avoid periods of prolonged single factor underperformance.

  • Relative to a static multifactor approach, a dynamic strategy allows investors to position more defensively when expected economic growth is expected to fall and, alternatively, position pro-cyclically when expected economic growth is expected to rise. Investors have the potential to achieve greater risk mitigation and greater return potential through a dynamic approach.

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    Based on the fundamental characteristics of size, value, momentum, low volatility, and quality. There is no guarantee that such goals will be realized or achieved or that an investment strategy will be successful. Investors should keep in mind that the securities markets are volatile and unpredictable. There are no guarantees that the historical performance of an investment, portfolio, or asset class will have a direct correlation with its future performance. Source: Invesco Investment Solutions.

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