40: Integrating ESG into a factor portfolio

As record numbers look to integrate sustainable investment considerations into their portfolios, it comes as no surprise that the world of factor-based investing is not immune. According to a 2018 survey conducted by FTSE Russell, 55% of factor investors are looking to incorporate environmental, social and governance (ESG) company analysis but as yet, there’s been no well-defined blueprint as to how this can be comprehensively achieved.

Joining Eliza are Adam Willis and Dave Barron to discuss the ins and outs of factor index construction and how schemes are building their factor portfolios to not only potentially outperform traditional market-cap index trackers but also integrate ESG analysis simultaneously.

David’s article “Responsible investing: factor friend or foe?” is available here:
http://www.lgim.com/uk/en/insights/our-thinking/market-insights/responsible-investing-factor-friend-or-foe.html

•    David Barron, Head of Equity Index
•    Adam Willis, Head of Index and Multi-Asset Distribution
•    Eliza Grimond, Investment Writer

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