Free Tool Helps Advisers Identify Return-Driven Investment Factors
Optimal Asset Management (OAM) is aiming to help institutional investors and investment advisers identify and implement investment factors that drive portfolio returns through its Factor Allocator visualization tool.
This is a free, web-based educational tool that features more than 20 years of historical factor-based index data from S&P Dow Jones Indices. The tool includes a “Factor Playground” feature which provides visual feedback on the impact of various factor choices. A “Factor Fit” tool helps financial professionals estimate the underlying mix of factors driving the returns of a mutual fund, exchange-traded fund (ETF) or active manager. Furthermore, the “Factor Fit” can help evaluate whether it may be appropriate to substitute an investor’s mutual fund or active manager holdings with a combination of low-cost ETFs that target similar returns drivers as the mutual fund or other core holding.
“As Smart Beta, Factor Based Investing and Style tilted strategies become more mainstream, there is an urgent need for easy-to-use tools to help investment professionals educate themselves about how to implement factors in their core portfolios,” says Vijay Vaidyanathan, PhD, chief executive officer of OAM. “We built Factor Allocator to help investment professionals play around and get comfortable with the exciting new generation of factor-based building blocks. Factor portfolios that seek to outperform and reduce risk at low cost can play a transformative role in client portfolios.”
Advisers can register for Factor Allocator at Optimalam.
Optimal Asset Management is an SEC-registered investment adviser specializing in the application of factor-based investing and technology to the asset management process.
NEXT: Putnam to Launch Alternative Strategies Funds
Putnam to Launch Alternative Strategies Funds
Putnam Investments will release several mutual funds that adhere to three alternative strategies aiming to provide advisers and their clients with portfolio construction tools designed to help them navigate varying market conditions. These funds will be sub-advised by PanAgora Asset Management and are expected to be available in the marketplace in the third quarter of this year.
The Putnam PanAgora Risk Parity Fund seeks total return under varying economic conditions through strategic allocation across asset classes. It is a multi-asset solution seeking to balance the fund’s portfolio risks and generate more stable returns and greater downside protection than more traditional multi-asset approaches. The fund allocates to equities to preserve capital during economic contraction by allocating to nominal fixed income, and to protect from inflation with commodities and inflation-linked bonds.
The Putnam PanAgora Market Neutral Fund pursues uncorrelated alpha by investing in long/short equity strategies. It is a systematic long/short global equity market neutral strategy that seeks to generate attractive absolute returns that are uncorrelated to general equity markets by identifying and exploiting multiple inefficiencies that exist in global markets. The fund will pursue a similar approach as the PanAgora Diversified Arbitrage strategy, which was incepted in 2010 for the institutional marketplace.
The Putnam PanAgora Managed Futures Fund seeks absolute return through a managed futures strategy that is designed to provide meaningful diversification to traditional asset classes. It seeks absolute return through a managed futures strategy that is designed to provide meaningful diversification to traditional asset classes. The fund utilizes systematic long/short exposure to liquid futures and forwards across commodities, equities, fixed income and currencies.
“We have entered an era when the marketplace increasingly understands the need for innovative investment approaches,” says Robert L. Reynolds, president and CEO, Putnam Investments. “These three new products will give mutual fund investors and their advisers access to strategies that have been used successfully by the institutional market for many years. In broadening its slate of alternative offerings, Putnam will be bringing the specialized investment capabilities of our affiliate, PanAgora Asset Management, to our clients.”