Smart Beta Strategies

Smart Beta & Factor Investing strategies have been developed by academic experts and practitioners to address the two main limits of traditional market capitalization weighted indices. Firstly, these indices do not adequately capture rewarded risk premia. Secondly, risk tends to be concentrated in few stocks or sectors. In response, different approaches have emerged with the objective to outperform and/or optimize risk vs cap-weighted indices. Even if there is no widely accepted definition, these Smart Beta strategies generally cover Risk-Efficient Solutions and Factor Investing.

Smart Beta by Amundi

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A risk-oriented allocation

For a long time, traditional equity investing has aimed at generating returns rather than managing risk. But in recent years institutional investors have started to change their attitude: mitigating risk is now more important than maximizing returns. The regulatory environment also leads to narrow capital requirement - and therefore the involved risks - without deteriorating performance.

Investors are thus increasingly wishing to conceive their allocation in terms of risks, rather than by country or sector.

To properly manage multi-dimensional risks, only a scientific and disciplined portfolio construction process can  enhance  diversification for better long-term performance.

Expert Talk

At Amundi, we are convinced that it is necessary to focus on risk management to generate a strong performance over the long term.

Bruno Taillardat , Global head of Smart Beta & Factor Investing, Amundi

A holistic approach of Smart Beta

The question is no longer why Smart Beta, but how to embrace it. Amundi mobilized the best of its resources (management teams, Research, Analysts, etc.) to identify, define and accompany the implementation of the Smart Beta strategy that fits the most the objectives and constraints of each investor.

Within product offering investors can find the :

  • Risk-Efficient Solutions│To avoid unrewarded risk premia
  • Factor Investing Solutions│To make the most of risk premia

Building tailor-made Smart Beta

In addition to open-ended funds, we can also provide investors with added-value services, to analyze their portfolios identify factor or risk biases that may affect negatively their performance. They can also benefit from our ability to build customized Smart Beta investment solutions, taking into account additional constraints such as ESG, Low Carbon, exclusions in terms of sectors or countries.

Working with recognized partners

A strategic partnership with ERI Scientific Beta

Since 2014, Amundi and the Edhec Risk Institute Sci Beta have partnered to combine ERI Scientific Beta’s expertise in the design of smart beta indices and Amundi’s know-how in offering innovative factor investing solutions.

Maximizing diversification in order to capture the risk premium of an asset class

  • TOBAM’s Maximum Diversification® approach, supported by original, patented research and a mathematical definition of diversification, provides clients with diversified core exposure, in both the equity and fixed income markets.
  • The Anti-Benchmark® strategy is based on the Maximum Diversification® approach and designed to access risk premium evenly from all the effective independent sources of risk available in the market at any given time.
  • Fully quantitative approach, developed, refined and maintained in-house by TOBAM research team.

Smart Beta at Amundi

10 years

track
 record

 + 19 bn €

of assets under
management

10

dedicated portfolio managers in Paris, Tokyo and Hong Kong

 

Note : Data as of 31/12/2017

Though leadership

Smart Beta & Factor Investing by Amundi

Thinking Ahead Institute practical guide co-authored with Amundi

 

Our approach
Our solutions
Our capabilities

Investing in equity factors for the long run

 

Amundi Smart Beta Viewpoint series

     

Factor Investing: Diversifying risks to enhance long-term performance

Alternative Risk Premia: What Do We Know?

Positioning Value in portfolio construction

   

   

Practical applications of Smart Beta: learning from client business cases

Using Factor Investing: How to make the most of factors

     

     
         

Partnership with ERI Scientific Beta

(an EDHEC-Risk Institute venture)

   
         

Fund Selection

This information is exclusively intended for “Professional” investors within the meaning of the MiFID Directive 2004/39/EC of 21 April 2004, and articles 314-4 and following of the General Regulations of the AMF. It is not intended for the general public or for non-professional individual investors within the meaning of all local regulations, or for “US Persons”, as defined in the Securities and Exchange Commission’s “Regulation S” under the 1933 U.S. Securities Act.

This non-contractual information does not under any circumstances constitute an offer to buy, a solicitation to sell, or advice to invest in financial instruments of Amundi or one of its affiliates (“Amundi”).

Investing involves risks. The performance of the strategies is not guaranteed. In addition, past performance is not in any way a guarantee or a reliable indicator of current or future performance. Investors may lose all or part of the capital originally invested.

Potential investors are encouraged to consult a professional adviser in order to determine whether such an investment is suitable for their profile and must not base their investment decisions solely on the information contained in this document. 

Amundi assumes no liability, either direct or indirect, resulting from the use of any of the information contained in this document, and shall not under any circumstances be held liable for any decisions taken on the basis of this information. This information may not be copied, reproduced, modified, translated or distributed, without the prior written approval of Amundi, for any third person or entity in any country or jurisdiction which would subject Amundi or any of its products to any registration requirements within these jurisdictions or where this might be considered unlawful. 

This information is provided to you based on sources that Amundi considers to be reliable, and it may be modified without prior warning.

Our solutions do not offer a performance or capital guarantee and present a risk of capital loss