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, we believe 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 seeks to 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 could potentially lead 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.
- 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 funds below.
BNP Paribas Funds Global Low Vol Equity
BNP Paribas Funds US Value Multi-Factor Equity
|The fund is rated 4 stars by Morningstar* and aims to increase the value of its assets over the medium to long term by exploiting low volatility stocks.||This fund follows a multi-factor approach that seeks to provide diversified exposure to US large-caps.
* Classic Capitalisation shareclass, rating 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. This advertisement has not been reviewed by the Monetary Authority of Singapore. It is issued and has been prepared by BNP PARIBAS ASSET MANAGEMENT Singapore Limited [BNPP AMS]. It is produced for information purposes only and does not constitute: 1. an offer to buy nor a solicitation to sell, nor shall it form the basis of or be relied upon in connection with any contract or commitment whatsoever or 2. investment advice. It does not have any regard to the specific investment objectives, financial situation or particular needs of any person. Investors should consult their own professional advisors in respect of legal, accounting, domicile and tax advice prior to investing in the fund(s), and in the event that he chooses not to seek advice from professional advisors, he should make an independent determination of the suitability and consequences of an investment. Investors considering subscribing to the fund(s) should read carefully the most recent prospectus, offering document including the risk factors and consult the fund(s’) most recent financial reports before investing, as available from BNPP AMS or its authorised distributors. Investments involve risks. Investments in emerging markets involve above-average risk. Given the economic and market risks, there can be no assurance that the fund(s) will achieve its/their investment objectives. Investments in the fund are not deposits or other obligations of, or guaranteed, or insured by BNPP AMS or its authorised distributors or its affiliates and are subject to investment risks, including the possible loss of principal amount invested. Returns may be affected by investment strategies or objectives, markets and economic conditions. Past performance of the fund(s) or the managers, and any economic and market trends or forecast, are not necessarily indicative of the future or likely performance of the fund(s) or the manager and the value of the investments in fund(s) may go down as well as up. Investors may not get back the amount they originally invested. Funds which are invested in emerging markets, smaller companies and derivative instruments may also involve a higher degree of risk and are usually more sensitive to price movements. Views and opinions included herein constitute the judgment of BNPP AMS and its affiliates at the time specified and may be subject to change without notice. BNP PARIBAS ASSET MANAGEMENT Singapore Limited - registered office at 20 Collyer Quay, #01-01, 20 Collyer Quay, Singapore 049319. Company Registration No. 199308471D. Copyright © 2020 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.