Factor Investing

Factor investing with Invesco

Investment factors are characteristics that help drive the risk and return of a stock or a bond, and different factors have historically outperformed the broad market in different types of environments.

At Invesco, we provide a complete offering of factor-based tools, thought leadership and solutions. We have created a wide range of single-factor and multi-factor strategies to give advisors the ability to build client portfolios with precise exposures targeted to their specific needs.

What is factor investing?

Factors provide a deeper, more precise lens through which to view your investment portfolio.

Investors can build portfolios by selecting stocks that exhibit tilts toward specific factors. Factors are the drivers of performance that can help explain an investment’s risk-return profile. Targeting these underlying drivers of return may provide a more finely tuned, systematic approach to portfolio construction.

Each of the six factors play a role in the performance of your investment.

Applies to investments trading at discounts to similar securities, based on measures like book value, earnings or cash flow.
value
Value
Represents the potential higher-than-benchmark returns associated with relatively smaller stocks within the universe being considered.
small size
Size
Describes investments in the least volatile securities within their asset class.
low volatility
Low volatility
Identifies investments with positive momentum (recent strong returns) or negative momentum (recent weak returns) to calibrate portfolio exposure to either.
momentum
Momentum
Characterizes companies with strong measures on financial health, including a strong balance sheet and stable earnings growth.
quality
Quality
Reflects stocks that have paid higher yields and generated higher total returns over time than lower-yielding assets.
dividend
Dividend yield

 

Using factors in portfolios

All portfolios exhibit factor tilts
Because of their fundamental and ubiquitous nature, factors have the potential to drive more precise investment and asset allocation decisions.

Intentionally seeking a diversified portfolio by blending factors may allow investors the opportunity to better match specific investment preferences.

Outcomes based on outlook
Factors perform differently based on macroeconomic influences, such as market volatility. Investors may use factors within portfolios to help achieve desired outcomes based on their market outlook.

Low volatility

Visit our low volatility strategy page to gain insight into the methodology, click here.

Invesco S&P 500 Low Volatility ETF

Invesco S&P MidCap Low Volatility ETF

Invesco S&P SmallCap Low Volatility ETF

Invesco S&P Emerging Markets Low Volatility ETF

Invesco S&P International Developed Low Volatility ETF

Invesco S&P 500 ex-Rate Sensitive Low Volatility ETF

Invesco S&P Minimum Variance ETF

Momentum

Visit our momentum solutions page to gain insight into the methodologies, click here.

Invesco DWA Momentum ETF

Invesco DWA SmallCap Momentum ETF

Invesco DWA Healthcare Momentum ETF

Invesco DWA Emerging Markets Momentum ETF

Invesco DWA Developed Markets Momentum ETF

Invesco DWA Technology Momentum ETF

Invesco DWA Consumer Staples Momentum ETF

Invesco DWA Energy Momentum ETF

Invesco DWA Industrials Momentum ETF

Invesco DWA Basic Materials Momentum ETF

Invesco DWA Consumer Cyclicals Momentum ETF

Invesco S&P 500 Momentum ETF

Invesco DWA Utilities Momentum ETF

Invesco DWA Financial Momentum ETF

S&P Emerging Markets Momentum ETF

S&P International Developed Momentum

Invesco DWA Momentum & Low Volatility Rotation ETF

Quality

Invesco S&P SmallCap Quality ETF

Invesco S&P 500 Quality ETF

Invesco S&P International Developed High Quality ETF

Value

Invesco S&P 500 Value With Momentum ETF

Invesco S&P 500 Enhanced Value ETF

Invesco S&P 500 Pure Value ETF

Invesco S&P Midcap 400 Pure Value ETF

Invesco S&P Smallcap 600 Pure Value ETF

Invesco Dynamic Large Cap Value ETF

Invesco Russell 2000 Pure Value ETF

Invesco Russell Midcap Pure Value ETF

Invesco Russell Top 200 Pure Value ETF

Size

Invesco S&P 500® Equal Weight ETF

Invesco DWA SmallCap Momentum ETF

Invesco FTSE RAFI US 1500 Small-Mid ETF

Invesco Wilshire Micro Cap ETF

Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF

Invesco S&P SmallCap Consumer Discretionary ETF

Invesco S&P SmallCap Consumer Staples ETF

Invesco S&P SmallCap Energy ETF

Invesco S&P SmallCap Financials ETF

Invesco S&P SmallCap Health Care ETF

Invesco S&P SmallCap Industrials ETF

Invesco S&P SmallCap Information Technology ETF

Invesco S&P SmallCap 600® Equal Weight ETF

Invesco S&P SmallCap Materials ETF

Invesco S&P SmallCap Utilities ETF

Dividend yield

Invesco S&P 500 High Dividend Low Volatility ETF

Invesco S&P SmallCap High Dividend Low Volatility ETF

Invesco S&P International Developed High Dividend Low Volatility ETF

Invesco Dow Jones Industrial Average Dividend ETF

Invesco Dividend Achievers ETF

Invesco High Yield Equity Dividend Achievers ETF

Invesco International Dividend Achievers ETF

Invesco KBW High Dividend Yield Financial ETF

Risks & other information

There are risks involved with investing in ETFs, including possible loss of money. Shares are not actively managed andare subject to risks similar to those of stocks, including short selling and margin maintenance. Ordinary brokerage commissions apply. The fund's return may not match the return of the underlying index.

Factor investing is an investment strategy in which securities are chosen based on certain characteristics and attributes that may explain differences in returns. There can be no assurance that performance will be enhanced or risk will be reduced for funds that seek to provide exposure to certain factors. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Factor investing may underperform cap-weighted benchmarks and increase portfolio risk.

Certain funds are considered non-diversified and may be subject to greater risks than a diversified fund.

The momentum style of investing is subject to the risk that the securities may be more volatile than the market as a whole, or that the returns on securities that have previously exhibited price momentum are less than returns on other styles of investing.

A value style of investing is subject to the risk that the valuations never improve or that the returns will trail other styles of investing or the overall stock market.

Investing in securities of small capitalization companies involves greater risk than customarily associated with investing in larger, more established companies.

Diversification does not guarantee a profit or eliminate the risk of loss.

Note: Not all products are available through all firms.