Why multi-asset investing calls for 3G factor models
Models based on investable indexes can be especially useful in helping investors discover the unseen risks influencing their portfolio
Factor models continue to increase in popularity, especially due to their most appealing attribute: the simplification of otherwise bewildering array of risk and return measures into a handful of explanatory causes. The aim is to identify a small number of causes (factors) that explain the complex dynamics of a large number of moving parts (securities in a portfolio). Factor modelling isn't just used in financial services: the statistical techniques we employ in our industry are just as
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