The sustainable investor for a changing world

Factor investing

Factor investing is an investment approach that aims to generate higher risk-adjusted returns by systematically selecting securities according to proven drivers of returns, known as factors. Often used factors include quality, value, momentum, low volatility.

BNP Paribas Asset management (BNPP AM) has been among the leaders in factor investing since 2009. Our quantitative team consists of more than 40 professionals with an average of 15 years’experience. Members of the team regularly contribute to academic research and industry thought leadership.

Why Factor Investing?

Coupled with the expertise of a skilled and experienced investment manager such as BNPP AM, this innovative approach can offer a number of benefits:

  • Attractive return potential from proven and efficient long-term sources of performance
  • Robust risk controls that can help keep a portfolio in line with investors’ preferred risk exposure
  • Diversification from more traditional investments
  • Integration of environmental, social and governance (ESG) principles that can enhance returns and better mitigate risk, while meeting sustainability goals

What makes us different ?

We have been managing factor-based strategies for a decade, both in equities and fixed income. Over the course of this decade, our combination of fundamental, academic and quantitative modelling expertise has resulted in a robust investment platform, which today fully integrates sustainability and climate change considerations.

Underpinning our platform are several key features that, we believe, can lead to better client and portfolio outcomes.

  • In-depth quantitative research: Research is at the heart of our investment process. Our strategies are based on in-house research conducted by our Quantitative Research Group (QRG), a highly experienced team of specialists that focus on the application of ideas and themes into the design of quantitative solutions and development of capabilities.
  • Factor risk targeting: Our research has shown that factor timing does not improve risk-adjusted returns over the long run. Instead, we believe maintaining a balanced targeted risk exposure to factors that exhibit low correlations to each other is important and leads to enhanced investment results.
  • Transparency: When designing factor-based strategies, we always seek to avoid unnecessary complexity. We believe this helps to make our strategies more understandable and transparent.
  • A systematic process: We believe in having a fully systematic investment process, for better discipline and efficiency. Being statistically robust and scientifically sound also allows us to produce reliable historical simulations to assess the long-term behaviour of our strategies.

Our Solutions

We are able to offer investors a variety of solutions that target single or multiple factors across asset classes and geographies. Moreover, our solutions can be fully customised to meet different investor needs: the return they expect, the level of risk they are willing to take, and the sustainability objectives they seek.

To learn more about some of our out-of-the box solutions, please view the fund below.

Global Low Volatility Equity
Rated 4 stars by Morningstar*
View Fund

*Source: Morningstar, the ratings refers to Classic Capitalisation share class, as of May 2020. Investments are subject to market fluctuations and the risks inherent in investments in securities. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay, the strategies described being in risk of capital loss. There is no guarantee that the performance objective will be achieved. Past performance or achievement is not indicative of current or future performance.

Copyright © 2022 Morningstar, Inc. All Rights Reserved. The overall star rating for each fund is based on a weighted average of the number of stars assigned to it in the three-, five-, and 10-year rating periods. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.