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Factor investing in equities and corporate bonds – a toolkit

Research papers

BNP Paribas Asset Management

Factor investing – the systematic search for alpha returns using well-documented properties of an asset class – can present challenges, but with the help of our latest white paper, webcast and practical guide, investors should feel assured that factor investing is for them too.

Factor investing is about using style factors such as value, quality, momentum or low risk to tilt investment portfolios in favour of cheaper (value), outperforming (momentum) stocks or corporate bonds from the most profitable and better managed (quality), less risky companies (low risk).

Putting together a factor-based portfolio can be a challenge. There is more to equity and bond returns than style factors. Making sure other factors do not interfere can make all the difference in factor investing.

These factors explain differences in the returns of stocks and corporate bonds

  • market factor, sector, region and size for stocks
  • duration, risk premium, sector, currency and size for corporate bonds.

These style factors tend to predict future differences in returns

  • value, quality, low risk and momentum.

Named Highly Commended in the best factor investing paper category 2019: Factor Investing in Equities and Corporate Bonds: Neutralising Bias 

savvy factor investing

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