Factor-Based Investing

Sharp U.S. policy shift and elevated uncertainty reflect an evolution of the new macro regime. What matters: getting a grip on uncertainty by identifying its core features.

The first half of 2025 may not have been kind to private equity, but new data suggests that things could turn around soon.

Israel-Iran hostilities brought a short-term market focus on oil. Longer term, artificial intelligence (AI) electricity needs could create a power shortage, as well as opportunities and risks for investors.

On the latest edition of Market Week in Review, Global Chief Investment Strategist Paul Eitelman explored key drivers behind the strong performance in markets. He also provided an update on a proposed U.S. tax measure.

With the first half of 2025 in the books, it’s been a very interesting six months — emphasis on “V” because the S&P 500 saw a nice V-shaped formation following the April sell-off. As markets always reveal, interesting times call for interesting ETF trends to follow.

In recent months, markets have whipsawed amid changes in trade policy, geopolitical shocks, concerns about fiscal sustainability, challenges to central bank independence, technological advancements, and earnings surprises in both directions. Despite this, stocks and bonds in much of the world are close to where they began the year.

For good reasons, many investors have a love-hate relationship with commodity investments. Operationally, the annoying K-1 form complicates tax filing, although thankfully the industry has started to launch “no K-1” funds.

This year’s formidable challenges have clarified strategic lessons for equity investors to apply in the coming months

Readers of a certain age will no doubt recall President Ronald Reagan launching one of the most ambitious military buildups in American history.

This article will help you evaluate whether it’s still a good time for clients to gain Bitcoin exposure—even after its recent all-time high—and how to do so responsibly. You’ll learn how Bitcoin fits into a diversified portfolio, what leading financial institutions forecast for its future, and why spot Bitcoin ETFs offer a regulated, practical entry point for long-term investors.

Until that US government debt-crisis moment arrives, which we will get through, things will muddle along.

Surprisingly, oil prices are receding after U.S. strikes on Iranian nuclear facilities over the weekend.

Investors attempting to manage volatility in their portfolio often employ defensive equity strategies to define their optimal market exposure and risk profile. Such strategies are designed to help limit losses on the downside, while also allowing investors to participate in the market’s gains.

While both valuation and technical factors suggest to us that the dollar may continue to weaken in the near-term, we would caution investors against reading too much concerning the US’ long-term economic stability into further dollar weakness.

The U.S. Dollar Index, when measured against a basket of other major currencies, has declined by approximately 10% this year through mid-June and is currently trading at its lowest level in three years.

Like all appetites, the consumer typically reaches some point of appeasement. That could be the case for central bank gold purchases, which have started to show signs of receding. But market experts do not see it faltering anytime soon.

Looking back on it, the first quarter of the year was a complete anomaly. Real GDP declined at a 0.2% annual rate, and the left side of the political spectrum said this proved current policies were a disaster.

Given the uncertainty of future events, global investors seek a “safe haven” for investment dollars. As such, U.S. Treasury Bonds and the U.S. dollar appreciate given their perceived “financial safety.” Last week, global investors were already starting to make that shift with the dollar rising.

Market concentration rewarded passive investors who held market weights in the surging mega-caps. Since late 2014, passive index returns ranked in the 10th percentile of all portfolios in eVestment’s US Large Cap Growth Equity universe. In other words, only 10% of active managers outperformed.

At Parametric, our years of experience have taught us that markets can swing up and down quickly and without warning. Since no one can time these swings, we believe it's imperative to seek both loss harvesting and benchmark tracking simultaneously.

How big data, AI and the human element can combine to better pursue consistent alpha.

If there is something the Federal Reserve (Fed) does not want to see today, as it approaches next week’s Federal Open Market Committee (FOMC) meeting, it is a shock to oil prices.

Smart beta strategies have endured a prolonged stretch of disappointing results, falling short of investor expectations. This article explores the underlying causes of that performance and outlines why the conditions ahead could be more favorable.

Bonds hit a headwind in May as rates rose, but year to date, they have helped offset some of the volatility seen in stocks. See Table 2 for bond index returns for May 2025, Q1 2025, and YTD.

President Donald Trump’s announcement on Wednesday of a new trade agreement with China is the kind of headline that gives markets a sense of relief. As I overheard this week at Wealth Management’s EDGE conference, which I attended in Boca Raton, Florida, we may have dodged a recession.

This week’s market resilience in the face of rising geopolitical tensions underscores an important structural shift. The Israeli strikes and broader Middle East dynamics, while concerning, sparked only a modest reaction—a far cry from the volatility such events triggered in past decades.

Tariff policy has clouded expectations for the second half of the year, but there are ways to navigate through the fog.

In part one of our new series, AI Alpha, we explored the sweeping potential of artificial intelligence (AI) as a transformative force.

Global markets may be more rattled than ever, but advisors can count on closed-end funds to offer yield, portfolio diversity, and more.

Head of EMEA and Asia Pacific Equities Lucas Klein and Head of Americas Equities Marc Pinto argue that progress on the trade impasse, further monetary easing, pro-growth reforms, and an innovation revolution should all prove supportive to equities over the mid term once the market moves past near-term volatility.

The first half of 2025 has been driven by headlines that have caused volatility in both the stock and bond markets. While tariff negotiations have commanded the most attention, we are now pivoting to the federal budget deficit, which feels like a perpetual headline over the last 15 years.

The global economy is continually evolving due to inflation, interest rates, and geopolitics. How could these and other factors influence the major asset classes over the coming decade?

The US housing market remains in a state of inertia. Despite the arrival of the spring selling season, both new and existing home sales continue to underwhelm.

The Fear Trade is what most Western investors are familiar with. It’s the flight to safety during times of uncertainty, driven by concerns over inflation, interest rates, geopolitical risk and more.

Markets may be fretting over Federal Reserve policy and economic soft landings, but a handful of momentum ETFs have quietly been stealing the show. Across the array of factor funds, momentum has performed best this year.

Systematic fixed-income investing is attracting increased attention but needs specialist skills and resources. Would your manager have what it takes?

Rebounding demand from ETF investors and resilient buying from central banks and Asia retail have propelled gold prices to fresh records north of US$3,000/oz. Find out why we believe there is more room to run.

Bouts of volatility may continue in the second half of 2025 as bond market investors navigate evolving tariff policy, U.S. government debt, and economic uncertainty.

Gold’s recent surge to $3,500 was quickly followed by a sharp correction. Each tariff update or diplomatic rumor sends markets into a frenzy—rallying stocks, selling gold, or reversing course the next day.

We remain underweight most developed market stocks as US tariff policy is still unclear but are more enthusiastic about emerging market assets.

In our view, using quantitative methods in a transparent, repeatable way to extract alpha through diversified factor tilts offers a compelling alternative in this new IG environment.