Professional services firm Aon has unveiled a multi-factor index which aims to fill a gap in the market for products targeting specific factors.
The customised index has been developed in partnership with index provider Scientific Beta and investment manager Legal & General Investment Management (LGIM).
Aon sponsored research with Cass Business School which highlighted the potential efficiency gains from investing in an alternative way to market cap indices.
Since then, Aon has built on this research and has identified four robust factors which have the potential to offer long-term outperformance: value, low volatility, quality and momentum.
The multi-factor index, which is available to both Aon’s advisory and delegated clients already has over £1.0 billion (€1.12 billion) of assets managed against it.
Andrew Peach, senior investment consultant at Aon, said: “Schemes are increasingly looking towards factor investing as a way to diversify and improve the investment efficiency of their equity portfolios.
“After extensive research, we felt there was a need to design a solution that would both reflect our empirical findings and be constructed based on our best ideas and beliefs. This customised factor index will enable our clients to reap the benefits of factor-based investing at low cost.”
©2018 funds europe
