Factor Investing

For years, factor investing has demonstrated its potential to outperform the general market.

For the past 20 years, a multi-factor strategy as targeted by the STOXX Europe 600 Industry Neutral Ax Multi-Factor Index has fared extremely well, and much of that consistent performance can be traced to the benefit of diversifying across different sources of return premia.

Stocks fell in February as the military conflict in Ukraine and sanctions imposed on Russia prompted investors to sell shares in all industries except basic-resources and energy companies.

Stocks tumbled last month, posting their weakest showing since March 2020 and the worst January since 2016, as investors assessed the potential impact of higher US interest rates.

Stocks rose in December and wrapped their third consecutive year of double-digit gains, as fears of economic disruption stemming from the Omicron coronavirus variant abated.

Stocks fell in November, with indices reverting gains in the month’s last three sessions, as the emergence of the Omicron variant raised concerns the COVID-19 pandemic may continue to undermine the global economy.

Stocks rebounded strongly from their September losses during October, as companies reported broadly better-than-expected third-quarter earnings.

Stocks posted their first monthly decline since January during September as rising prices from food to energy stoked concerns that central banks may have to raise interest rates just as an economic recovery is losing steam.

We talk to Abhishek Gupta, FlexShares’ Senior Quantitative Strategist, about the company’s new ETFs covering low volatility and high dividend strategies in emerging markets. The funds, which track STOXX indices, include Northern Trust Asset Management’s proprietary quality and ESG screens, as well as climate filters, aimed at helping improve risk-adjusted returns.

Stocks rose for a seventh straight month during August, amid ongoing optimism that the global economy continues to rebound from the COVID-19 slump and as the US Federal Reserve indicated it won’t rush to raise interest rates.

Chris Huemmer, Northern Trust Asset Management’s Senior Investment Strategist, discusses his firm’s innovative ETFs tracking multi-factor, ESG and climate strategies, and the role of an index provider in wrapping up a holistic investment approach.

This whitepaper evaluates two thematic investment strategies – STOXX® Global Ageing Population (“Ageing Population”) and STOXX® Global Millennials (“Millennials”) – which seek exposure to these two distinct generations.