Factors’ active role in portfolio construction
categories: Americas, Asia Pacific, Australia, EMEAI, AYLUR SUBRAMANIAN Raman, Factor and Risk Modeling, Investing (Investment Management), Performance Analysis, Portfolio Construction and Optimization, Risk Management, Asset Owners, Asset Managers (Quant or Fundamental), Wealth, Portfolio Management Analytics, Risk Management Analytics, Equities
As important systematic sources of risk and return, factors play a vital role in building, maintaining and measuring actively managed equity portfolios. Investors and technology continue to grow more sophisticated, which has given rise to new ways of gathering, sorting and analyzing information — and new investment approaches. A factor-based approach can provide deeper insight into funds and individual securities. Research by MSCI and others has continued to show that factors have been significant contributors to active returns in active equity portfolios. As published in the July/August 2019 Investments & Wealth Monitor.