Factor Investing - What Are the Trends?

In this episode I speak with Dr. Michael Hunstad, Head of Quantitative Strategies at Northern Trust.

Our conversation centers around the four key trends Michael is seeing among institutional allocators in the factor space today. These trends are (1) the adoption of factors to manage concentration risk in market-cap weighted benchmarks, (2) a move from single- to multi-factor implementations, (3) using factors to de-risk equity exposure, and (4) a tactical tilt towards value.

But Michael isn’t afraid to get in the weeds. He discusses the risks of unintended exposures at length and at one point even explains the importance of matching decay speeds of different factor signals within multi-factor implementations.

For those interested both in the macro trends and the micro details of factor investing, this is not one to miss.

I hope you enjoy my conversation with Dr. Michael Hunstad.