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Multi-Factor Equity

Offering investment options that lie between active and passive investing

HSBC Multi-Factor Equity aims to deliver consistent outperformance against a market cap weighted index in a systematic and risk-controlled manner. The strategy is designed to provide investors with exposure to multiple factor premia, such as value, quality, momentum, low risk and size.

Markets are not fully efficient which makes them prone to mispricing over the short-term. Anomalies can persist for a while but, ultimately, there is mean-reversion to fundamentals – this creates opportunities for long-horizon investors who focus on fundamentals.

Why consider Multi-Factor Equity investing

Equity markets exhibit deviations from simple beta/return relationships which offers a potential opportunity to outperform market cap weighted indices. This can be achieved by using systematic strategies that target equity market segments which exhibit high exposures to factors that deliver anomalous returns. By targeting a broad exposure to cyclical, defensive, and dynamic factors, the benefits of diversification have enabled multi-factor strategies to realise long-term factor outperformance whilst smoothing their cyclicality.

Return enhancement Harvests long-term factor risk premia, targeted to deliver strong risk-adjusted returns.
Risk management & control Well-run Multi-Factor portfolios should be built on a flexible framework that can accommodate a wide range of client-specific constraints and tracking error budgets.
Efficient cost management Multi-Factor Equities can provide a low-cost solution, allowing better use of cost budgets.

Source: HSBC Asset Management. For informational purposes only and should not be construed as a recommendation for any investment product or strategy. The views expressed above were held at the time of preparation and are subject to change without notice.

Investing with HSBC Asset Management

1

Rich experience in working with clients to implement customised portfolios

The flexibility of our factor investing framework enables our process to accommodate client-specific guidelines such as tracking error ranges, country restrictions, sector risk exposures and ESG requirements.
2

Robust investment framework

Our pure factor approach together with fully aligned risk models and flexible portfolio optimisation tools developed and owned by the team, give us a sustainable edge in the factor investing space.
3

Fully bottom up

Stock by stock signals to drive a bottom-up portfolio construction process with proprietary factor definitions.
4

Well-resourced research team

Our fully proprietary approach is designed and managed by a globally integrated research, portfolio management and trading team. We empower them to focus on their own area of specialist expertise as we believe this delivers the best outcomes for our clients.

Investment Vehicles

Our Multi-Factor Equity strategy is available to Institutional Investors implemented in either a segregated account tailored to the investor’s requirements or in one of the pooled funds listed below:

Fund Name Legal Structure Domicile Investment Region
HSBC US Multi-Factor Equity Fund OEIC & ICAV UK/Ireland USA
HSBC UK Multi-Factor Equity Fund OEIC UK UK
HSBC GF ICAV Multi-Factor Worldwide Equity Fund ICAV Ireland Global
HSBC GF ICAV Multi-Factor EMU Equity Fund ICAV Ireland Europe
HSBC Multi-Factor Worldwide Equity UCITS ETF ETF Ireland Global
HSBC GIF Global Lower Carbon Equity SICAV Luxembourg Global
HSBC GIF Global Equity Volatility Focused SICAV Luxembourg Global

Find out more

Risk warnings

Investing involves risk and the value of an investment and the income from it may fall as well as rise. You may not get back the full amount invested.
  • Counterparty Risk: The possibility that the counterparty to a transaction may be unwilling or unable to meet its obligations.
  • Derivatives Risk: Derivatives can behave unexpectedly. The pricing and volatility of many derivatives may diverge from strictly reflecting the pricing or volatility of their underlying reference(s), instrument or asset.
  • Emerging Markets Risk: Emerging markets are less established, and often more volatile, than developed markets and involve higher risks, particularly market, liquidity and currency risks.
  • Exchange Rate Risk: Changes in currency exchange rates could reduce or increase investment gains or investment losses, in some cases significantly.
  • Investment Leverage Risk: Investment Leverage occurs when the economic exposure is greater than the amount invested, such as when derivatives are used. A Fund that employs leverage may experience greater gains and/or losses due to the amplification effect from a movement in the price of the reference source.
  • Liquidity Risk: Liquidity Risk is the risk that a Fund may encounter difficulties meeting its obligations in respect of financial liabilities that are settled by delivering cash or other financial assets, thereby compromising existing or remaining investors.
  • Operational Risk: Operational risks may subject the Fund to errors affecting transactions, valuation, accounting, and financial reporting, among other things.
Further information on the potential risks can be found in the Key Investor Information Document (KIID) and/ or the Prospectus or Offering Memorandum.
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