Academic research has shown that the behavior of financial markets can be decomposed according to the characteristics of equity securities such as behavior over time, market capitalization, volatility, valuation, etc.
Seeyond's Equity Factor Investing strategy seeks to efficiently combine these characteristics with respect to a predefined relative risk budget (tracking error) compared with a benchmark index, with the objective of outperforming the benchmark markets over the long term.
Performance factors are selected according to simple criteria: their ability to outperform over time compared with traditional indices and their complementary behavior throughout the cycle
An equity investment solution that adapts to different market configurations
A strategy that can be deployed over several geographical areas and adapted to different relative risk budgets
The Equity Factor Investing strategy defines an exposure to equity markets through an active allocation based on single stock characteristics. The complementary nature of these characteristics in the portfolio construction aims to minimize risk by diversifying the portfolio allocation on favored themes depending on the position in the economic cycle (growth, crisis, rebound).
The objective of the strategy is to outperform its benchmark index over a recommended minimum investment period of 5 years, within a predefined annual ex-ante tracking-error target.
Main risks: capital loss, equity market risk (including small and medium caps), currency risk, discretionary management
The strategy has been implemented in the following geographical areas :