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Asset Management

Factor funds head for half a trillion

Money is pouring out of active runs run solely by humans and heading for computer-aided funds that 'factorise' investments into their component parts

Money is pouring into computer-aided funds
Money is pouring into computer-aided funds Photo: iStockphoto

As investors turn from stock-pickers, many commentators have assumed it is boom-times for index-tracking funds. But a form of semi-active fund management known as "factor investing" could hand asset managers a lifeline.

Factor investing has been around for many years, but is set to go mainstream, doubling assets under management in Europe in the next five years to almost half a trillion euros, according to the consultancy Spence Johnson.

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