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Unigestion unveils pair of multi-factor equity funds

Unigestion unveils pair of multi-factor equity funds

Institutional asset manager Unigestion has launched two factor-allocated equity funds co-created with pension administrator services provider RPMI Railpen, which is providing seed capital for both strategies.

The funds are a long-only active factor strategy, combining a number of identified factors, and a long/short factor fund, which follows a market neutral, pure alpha strategy aiming to profit from both positive and negative factor exposure.

Geneva-based Unigestion said the strategies will allocate to higher quality value stocks, less volatile momentum stocks, more diversified quality stocks and more stable small cap stocks.

The portfolio construction will be determined through a top-down macro as well as stock-level risk assessment.

Commenting on the launch, Unigestion’s head of equities Alexei Jourovski who is Citywire + rated, said: ‘We believe that factor allocation can be improved by better risk management, taking into account market and sector characteristics and actively assessing top-down and stock-level risk in the portfolio construction.’

‘Moreover, as equity factors tend to be cyclical, we can significantly improve the risk return profile of the strategy by allocating between factors at different points of the market cycle.’

Speaking to Modern Investor in December, Unigestion’s investment director for equities Bruno Taillardat said that some institutional investors are looking to replace some of their active strategies with pure exposure to specific beta factors as they are questioning the ability of long-only value equity managers to produce alpha.

‘Instead of paying high fees, some institutional investors are opting for a pure exposure to the value factor through an ETF, for example,’ he said. ‘They believe active managers are not delivering as much alpha as expected.’

Speaking to Modern Investor in December, Unigestion’s investment director for equities Bruno Taillardat said that some institutional investors are looking to replace some of their active strategies with pure exposure to specific beta factors as they are questioning the ability of long-only value equity managers to produce alpha.

‘Instead of paying high fees, some institutional investors are opting for a pure exposure to the value factor through an ETF, for example,’ he said. ‘They believe active managers are not delivering as much alpha as expected.’


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