Growth in multi-factor strategies was born out of the GFC as investors increased the search for investments that target a smoother ride in volatile and often event-driven markets. The SPDR MSCI World Quality Mix Fund (QMIX) combines the factors of value, quality and low volatility to provide a diversified return stream without the big drawdowns of single-factor strategies.
The smart beta strategy provides rules based factor exposures, delivering expected strategy return outcomes similar to the stock selection techniques used by fundamental or quantitative active managers, but with the benefits of passive investment efficiency.
In our latest edition we interview SSGA head of portfolio strategists APAC, Jonathan Shead. He says QMIX was built around value, quality and low volatility because SSGA believes they are strongest factors most easily understood by the market.
Read the article here for more.