Factor investing at SEI
An active, rules-based approach to factor investing with the flexibility to adjust portfolio allocations as the market environment evolves.
Factor investing at SEI
Investors make decisions that tend to reflect fear and greed. These decisions can create inefficiencies at the overall market level.
Behavior-driven inefficiencies can be volatile over the short term and are sensitive to economic cyclicality. However, they have also demonstrated historical long-term persistence. These factors are the characteristics of securities that have been historically associated with excess risk-adjusted returns.
Factor investment strategies provide transparent, systematic (or rules-based) exposure to factors including:
Value: involves picking stocks that appear to be trading for less than their book value.
- Cyclical value
- Stable value
Momentum: aims to capitalize on existing trends in the market, such as the ability for pricing to sustain itself and continue.
- Price momentum
- Earnings revisions
Quality: uses clearly defined criteria that seeks to identify companies with outstanding characteristics such as management and balance sheets.
- Accounting quality
Low volatility: designed to balance risk and return with a portfolio of stocks with lower price volatility than the broad market or benchmark.
Our approach to factor investing is adaptive, using a combination of metrics tied to a particular sub-factor. Factors may change based upon broad shifts in company fundamentals, so our measures may also evolve. We optimize weights in the context of the full portfolio rather than rank holdings like an index.
We offer the following strategies through our Managed Accounts Solutions:
Factor Tilt Strategies
- Systematic U.S. Large Cap Core – Momentum Tilt
- Systematic U.S. Large Cap Core – Value Tilt
- Systematic U.S. Large Cap Core – Quality Tilt
Enhanced Factor Strategies
- Enhanced U.S. Large Cap Momentum Factor
- Enhanced U.S. Large Cap Value Factor
- Enhanced U.S. Large Cap Quality Factor
This material is not intended to be a forecast of future events, a guarantee of future results and should not be relied upon by the reader as research or investment advice. It is intended for educational purposes only and is provided by SEI Investments Management Corporation (SIMC), a registered investment adviser and wholly owned subsidiary of SEI Investments Company.