If investors want to maximize their exposure to underlying factors while maintaining control over the risk profile of their portfolios they need to keep volatility close to market level. We recently launched the MSCI Diversified Multiple-Factor Indexes. These indexes combine four well-researched factors — value, momentum, size and quality — with a control mechanism designed to keep volatility in line with the market.

We know multi-factor indexes are important for investors seeking diversified exposure to factors that have historically generated superior returns. However investors may want to diversify away from just a single factor without diluting the strength of their exposure to their targeted factors, without structurally changing the risk profile of their portfolios.

By embedding a risk control the MSCI Diversified Multiple-Factor Indexes addresses this need - it significantly diversifies the risk characteristics of the corresponding single-factor indexes, providing high, persistent and controllable factor exposures that delivers market-like volatility over time.

Read our research paper to understand how our research experts constructed the index, understand our methodology and factor optimization and see how the index offers diversification performance benefits over single-factor indexes.