Why factor crowding fears are overblown

Factor investing has little impact on exposures, claims La Française Investment Solutions

The rush into factor investing strategies – today worth about $1 trillion – has raised concerns that alternative factors are becoming crowded, and therefore overpriced and more sensitive to dislocation events. Is this fear justified?

This article seeks to answer that question in relation to equity alternative premia, the best known and most popular premia. The arguments put forward are equally valid for premia in other asset classes.

We first return to fundamentals that underlie the existence

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Asset-liability management: Special report 2023

There is nothing new about the dynamics behind the ALM banking crisis of earlier this year: maturity transformation, liquidity risk and interest rate risk are at the heart of the traditional banking business model. But these old threats have been given…

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