Risk & Reward – Active bond returns – powered by factors

The latest edition of Risk & Reward features new research and views on active bond returns (powered by factors), ESG / active engagement, pension reform in China, low volatility approaches and equally weighted ETF portfolios.

Active bond returns – powered by factors

Jay Raol and Stephen Quance provide a basis for the component of factor investing in fixed income strategies. Based on their findings, factor exposures explained 66% of the benchmark excess returns. Shane Gallagher joined the conversation to further explain the impact of a factor framework.

A perspective on active engagement

ESG plays a crucial role in the Henley Investment Centre investment processes. In this article, the team explain their preference for engagement over exclusion and how this is implemented in equity portfolio management. This article includes three case studies.

Pension reform paves the way for target-date funds in Mainland China

China has recently introduced retail pension target date fund guidelines, marking a key milestone in the development of the mainland’s commercial pension system and asset management industry. A team of Cambridge Judge Business School’s Master of Finance programme students joined us in studying the impact of these guidelines.

Low volatility anchoring

With mounting evidence in support of the “low volatility anomaly”, more and more investment products have been developed with the aim of exploiting it. Invesco Quantitative Strategies presents an approach tested in multiple marketing environments and regions.

Equal weighting in sector portfolios

The purpose of this article is to study the effects of equal weighting with more narrow portfolios, such as sector-specific portfolios. It presents a balanced comparison for market cap versus equal weight strategies.
 

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Investment risks

The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

Important information

Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice.

This document is marketing material and is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell securities.