Decoding risk and return using portfolio analytics

While asset selection is an important determinant of portfolio risk and returns, allocation decisions have traditionally been made on an ad-hoc basis. More recently, institutional investors have adopted risk budgeting across asset classes to recognize the underlying drivers of risk and return - factors. By systematically incorporating factors into the investment process and diligently managing associated risks, investors can seek to maximize alpha and achieve better risk-adjusted returns. 

In this webinar, experts from MSCI, EDS, and Broad Bay Capital Management discussed how investors used factor-based analysis to precisely apportion the risk and performance to stock selection versus other factors, creating a differentiated portfolio. They also shared how investors were using factor models to preserve and maximize their unique sources of alpha while minimizing risk.

Topics discussed

• Managing risk in asset selection  
• Key use cases enabled by factor models 
• How to generate and maximize portfolio alpha with factors