Factor allocations and factor applications expanding.
ATLANTA: Invesco revealed that factor allocations and factor applications among North American investors are expanding.
In a survey of over 300 institutional and wholesale factor investors globally, Invesco found that as respondents gain experience in utilizing factor portfolios they are increasing their usage.
Invesco is a leading asset manager with over 30 years of expertise in factor investing. The concept of factor investing - an investment strategy in which securities are chosen based on certain characteristics and attributes - has existed since the 1950s. However, the strategy has only gained prevalent acceptance in recent years. Since Invesco first polled investors about factors in 2016, North American respondents have increased their adoption of factor strategies at an average rate of 5% per year.
Invesco found that while an asset owner often commences their factor journey with a single strategy, as time goes by they tend to implement additional factor strategies and consider how to extend their factor portfolio from equities to fixed income and multi-asset. Nearly half of the respondents plan to increase their allocation to factor strategies in the next three years.