Sustainable equity QI
Smart equity solutions investing in low volatility and quality factors could offer diversified, cost-effective and defensive exposure to global equity markets.
The opportunity
Factor investing seeks to identify and classify common characteristics of companies, and the historical risk and return those characteristics have delivered.
When efficiently deployed with rich data sets and sophisticated analysis, factor investing can provide investors with diversified exposure to equity markets. Individual factors offer different patterns of risk and return. This means investors can choose to target just one factor or a mix factors in a way that best matches their investment needs.
We have developed a smart equity strategy designed to help investors navigate volatile and uncertain times, while still seeking to capture some of the long-term growth associated with investing in shares of companies.
Strategy highlights
Cutting-edge approach
Equity QI data and quantitative research covers thousands of companies across global equity markets. Our approach combines cutting-edge technology with company fundamentals, proprietary data and machine learning, which we believe improves investment outcomes.
Data-driven analysis
Factors are common characteristics among stocks that have been linked to specific investment outcomes.
AXA IM Sustainable Equity QI focuses on factors that we believe may outperform the market with less risk.
Focus on sustainable returns
We use an advanced form of factor investing to seek companies with high-quality and sustainable earnings, with an emphasis on those with low share price volatility. A blend of these factors has the potential to mitigate risk while capturing returns.
Sustainability
Being sustainable is not just about earnings, and we also integrate environmental, social and governance (ESG) criteria into our analysis. Our strategy is designed with the aim to deliver low cost and attractive risk-adjusted long-term growth across market cycles, while targeting a better environmental footprint than its benchmark, the MSCI World index. For us, this is the definition of ’sustainable investing’.
As long-term investors, we aim to ensure our advanced factor strategies are implemented thoughtfully and efficiently, aiming to reduce risk and unnecessary costs for our investors.
Find our more about our sustainable equity QI strategy
Our sustainable equity QI strategy seeks to achieve a long-term return above that of global equities with lower volatility, while applying an ESG-based approach.
View fundInvestment risks
Investment in equities involves risks including the loss of capital and some specific risks, such as:
- counterparty risk
- derivatives
- geopolitical risk
- volatility risk
Some strategies may also involve leverage, which may increase the effect of market movements on the portfolio and may result in significant risk of losses.
Important information
Marketing communication. For professional investors only.
This document is directed only at person(s) who have professional experience in matters relating to investments (“relevant persons”). Any investment or investment activity to which this document relates is available only to and will be engaged in only with Professional Clients as defined in the rules of the Financial Conduct Authority. Any person who is not a relevant person should not act or rely on this document or any of its contents.
Past performance or achievement is not indicative of current or future performance. Performance is calculated net of fees unless otherwise stated.
Any views expressed here are those of the author as of the date of publication, based on available information, and subject to change without notice. This material does not constitute investment advice.
Investments are subject to market fluctuations and the risks inherent in investments in securities. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial investment. There is no guarantee that the performance objective will be achieved.
Equity strategies may be exposed to other risks defined below:
MARKET RISK: This is a general risk that affects all investments. Price for financial instruments are mainly determined by the financial markets and by the economic development of the issuers, who are themselves affected by the overall situation of the global economy and by the economic and political conditions prevailing in each relevant country
EQUITY RISK: The risks associated with investments in equity (and similar instruments) include significant fluctuations in prices, negative information about the issuer or market and the subordination of a company’s shares to its bonds. Moreover, these fluctuations are often amplified in the short term. the risk that one or more companies suffer a downturn or fail to grow can have a negative impact on the performance of the overall portfolio at a given time. There is no guarantee that investors will see an appreciation in value. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial investment.
INTEREST RATE RISK: The value of an investment may be affected by interest rate fluctuations. Interest rates may be influenced by several elements or events, such as monetary policy, the discount rate, inflation, etc.
CREDIT RISK: This is the risk that may derive from the rating downgrade of a bond issuer to which the strategies are exposed, which may therefore cause the value of the investments to go down. Strategies investing in high-yield bonds present a higher than average risk due to the greater fluctuation of their currency or the quality of the issuer.
LIQUIDITY RISK: This risk arises from the difficulty of selling an asset at a fair market price and at a desired time due to a lack of buyers.
COUNTERPARTY RISK: This risk is associated with the ability of a counterparty in a financial transaction to fulfil its commitments like payment, delivery and reimbursement.
OPERATIONAL AND CUSTODY RISK: Some markets are less regulated than most of the international markets; hence, the services related to custody and liquidation for the strategy in such markets could be more risky.
DERIVATIVES RISK: When investing in over-the-counter or listed derivatives, the fund aims to hedge and/or to leverage the yield of its position. The attention of the investor is drawn to the fact that leverage increases the volatility of the strategy.
CAPITAL RISK: The investments in the funds are subject to market fluctuations and the risks inherent in investments in securities. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay, the funds described being at risk of capital loss.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) INVESTMENT RISK: The lack of common or harmonized definitions and labels integrating ESG and sustainability criteria at EU level may result in different approaches by managers when setting ESG objectives. This also means that it may be difficult to compare strategies integrating ESG and sustainability criteria to the extent that the selection and weightings applied to select investments may be based on metrics that may share the same name but have different underlying meanings. In evaluating a security based on the ESG and sustainability criteria, the Investment Manager may also use data sources provided by external ESG research providers. Given the evolving nature of ESG, these data sources may for the time being be incomplete, inaccurate or unavailable. Applying responsible business conduct standards in the investment process may lead to the exclusion of securities of certain issuers. Consequently, the strategy’s performance may at times be better or worse than the performance of relatable funds that do not apply such standards.
This is not an exhaustive list of risks. For a full description of risks associated with each fund, please consult a client relationship manager or the global BNP Paribas Asset Management website: staging.bnpparibas-am.co.uk.