Invesco Global Thought Leadership

Invesco Global Factor Investing Study 2020

19 October 2020
The study uncovers the strategies and views of factor investors across the globe
Highlights
238
1
Total sample respondents globally
US$25.4 tn
2
in assets under management
5
3
Key themes

Discover what factor investors around the globe are thinking right now in our fifth global factor investing study. It brings together the views of nearly 240 pension fund managers, insurers, sovereign investors, asset consultants, wealth managers and private banks. The biggest study of its kind in the industry, we spoke face to face with 138 institutional investors and 100 wholesale investors, representing over US$25.4 trillion AUM.1

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theme 1

Theme 1

Factor investors are resilient in the face of uncertainty

Investors are continuing to increase factor allocations despite a challenging period and divergent factor performance.

Theme 2

Theme 2

Fixed income factor investing continues to gain traction through potential for enhanced returns and stronger risk management

Investors see factors as an important tool for managing fixed income risks, while the sources of alpha within the asset class are seen as creating significant opportunities for enhancing returns through a factor approach.

Investors look to the intersection of ESG and factor investing

Theme 3

Investors look to the intersection of ESG and factor investing

ESG is seen as aiding factor strategies and recent performance has added to momentum, with investors who have incorporated ESG more likely to cite positive performance from their factor allocations.

ETFs can offer a familiar and flexible tool for implementing factor strategies

Theme 4

ETFs can offer a familiar and flexible tool for implementing factor strategies

The majority of investors use ETFs as part of their factor strategies, with use having increased overall in the past 12 months. Price and ease-of-use advantages are particularly valued by investors, while liquidity and transparency are particularly valued by investors using ETFs to implement active strategies.

Theme 5

Theme 5

Levelling up: demand for additional services and improvements in implementation

Factor investors are developing increasingly sophisticated strategies and upgrading their factor capabilities. Multi-factor is now the norm, and as factor investing permeates through portfolios, there is greater focus on tracking of exposures and correlations.

The Invesco advantage

US$108+ billion in AUM2

Invesco’s factor investing capabilities span a spectrum of options from market-weighted passive to customised active, enhanced by open architecture

36+ years of experience

Invesco has a vast long-term commitment to factor investing, starting in 1983

Focus on our clients

Invesco factor investing strategies encompass individualized portfolio solutions, customization, and support

 

Discover Invesco Factor Investing

Additional resources

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  • 1

    As at 31 March 2020
  • 2

    As at 30 September 2020

  • The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

    Factor investing is an investment strategy in which securities are chosen based on certain characteristics and attributes that may explain differences in returns. Factor investing represents an alternative and selection index based methodology that seeks to outperform a benchmark or reduce portfolio risk, both in active or passive vehicles. Factor investing may underperform cap-weighted benchmarks and increase portfolio risk.

  • 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.