Worried about emerging markets? Consider the low volatility factor.

History shows that when EM stocks sell off, US low vol stocks generally outperform

Nick KalivasTime to read: 2 min

Emerging markets (EM) have been turbulent throughout 2018 due to US-China trade tensions, the deleveraging of the Chinese economy, Brazilian political uncertainty, Middle Eastern conflict and Russian sanctions. The recent plunge in the Turkish lira has only added to investors’ jitters. As EM stocks fall, many investors may be looking to US stocks as a hedge against risk. Based on past periods of EM turbulence, I believe US low volatility stocks in particular warrant a closer look.

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How factors may help bond investors reach their goals

The quality and value factors may help investors target specific risk and return objectives

Time to read: 3 min

In recent years, factor-based investments have become increasingly popular for equity investors. Often missing from the discussion, however, is the concept of fixed income factor strategies. At Invesco Fixed Income, our view is that bond investors can potentially benefit from a factor-based approach. We’ve launched a new suite of exchange-traded funds focused on two factors — quality and value — that we believe may help investors reach their objectives.

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The Q2 factor winner? Small cap.

As global risks grow, factor diversification may help investors stay prepared

Nick KalivasTime to read: 4 min

With fears of a trade war looming over global large-cap stocks, the small-cap factor emerged as the clear winner of the second quarter. Specifically, small-cap low volatility/high dividend was the best-performing factor, followed by the small-cap versions of value, growth, equal weight and momentum (see the chart below for the indexes that represent these factors).

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How did factors perform during a roller coaster first quarter?

Growth, momentum factors prevail after a volatile start to the year

Nick KalivasTime to read: 5 min

Equities experienced heightened volatility during the first quarter of 2018, with the S&P 500 Index surging 7.55% from Dec. 31 2017, through Jan. 26, 2018, before dropping nearly 8% through quarter-end.1 Early in the quarter, market activity was buoyed by upward revisions to corporate profit outlooks following federal tax cuts in December, coupled with a squeeze on short volatility positions.

However, this momentum eased in the final two months of the quarter as investors became uneasy over a number of developments:

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Examining factor performance during a year of concentrated gains

Market trends sparked big wins for growth and momentum in 2017

Nick KalivasTime to read: 3 min

The books are closed for 2017. It was another strong year for the equity market, with the S&P 500 Index up 21.8%. Performance was highly concentrated, with more than one-third of the S&P 500’s gains linked to technology stocks and roughly 15% of the gains coming from the financials sector. Health care came in a close third to financials, representing 14.2% of the S&P 500’s total return. Together, these three sectors accounted for more than two-thirds of the S&P 500’s gains. Conversely, energy and telecommunication services were the only two sectors with negative performance. The table below highlights each sector’s contribution to the total return of the S&P 500 Index in 2017.

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