- Co-Head of Investment Strategy
United States, Institutional
Change
With risk management in its DNA, our Fundamental Factor Team specializes in improving portfolio outcomes and addressing client challenges through factor-based investing.
Factor-based capabilities
From factor and manager research to outcome-driven client solutions
Factor construction
The Fundamental Factor Team identifies new areas of factor research through collaboration with fundamental portfolio managers. Proprietary factors are created by quantifying fundamental equity characteristics and are then made investable through portfolio construction.
Factor classification
Factors are classified according to their portfolio characteristics, the role they play in a portfolio, and the diversification and risk management benefits they may offer.
Manager selection
To select managers, the team focuses on the “3 Rs”: the role the manager’s strategy will play, the risks the manager takes, and the residual alpha potential (in other words, manager skill).
meet some of our factor-based investing experts
- Portfolio Manager
- Head of Manager Research
Connect with the iStrat platform
Insights
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Insights Posts
Divergence isn’t just about central bank policy
Divergence has implications for investors —and central bank divergence is only one of five ways to think about it.
8
min
Article
2025-06-30
Using defensive equities in a return-seeking portfolio: A factor framework for corporate plans
Members of our LDI and Fundamental Factor teams share their views on defensive equity investments, including their role in a plan's portfolio and the current environment for defensive factors.
Article
2025-03-31
Navigating a volatile reality: three ideas for 2024 and beyond
2023 saw investors grapple with a new, more volatile reality. How should portfolios be positioned for opportunities and challenges in 2024?
Article
2025-01-31
Multi-Asset Market Outlook
To help think through the asset allocation outlook and implications for 2023, we offer views from iStrat, our investment strategy and solutions group
Article
2024-12-31
Lessons from 2008: Stress testing portfolios in today’s market
While very different from 2008, the current market environment makes a strong case for portfolio stress testing. Gregg Thomas, Co-Head of Investment Strategy, offers suggestions for improving the process, including assessing factor positioning and reducing recency bias.
Quick Take
2024-04-30
In a new era for interest rates, can hedge funds fill the role of fixed income?
Hedge funds could be valuable building blocks for a fixed income substitute portfolio, but how should the portfolio be constructed? Members of our Fundamental Factor Team share their views.
Article
2023-11-30
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FAQs: Factor-based investing
Fundamental factors are factors designed to reflect the philosophy of active managers within a given market (such as global equities, government bonds, corporate bonds, and currencies). Our approach is intended to provide an analytical framework for understanding how a manager builds and manages a portfolio, rather than finding factors to explain market volatility or behavior. The goal is to understand what is “fundamental” to the manager’s process so that we can better evaluate risks and alpha over time.
The fundamental factor team uses factor-based research in two ways:
- Multi-strategy portfolios — Building portfolios and solutions using Wellington’s active managers as building blocks
- Proprietary factor portfolios — Building portfolios and solutions using liquid, long-only factors created from research in collaboration with fundamental portfolio managers.
A factor-based approach to portfolio construction and risk management may help improve outcomes by creating portfolios in line with a range of diverse client objectives. Factor-based analysis can be a powerful way to assess manager performance, as it allows a manager’s security selection skill to be separated from their investment style.
The team is able to integrate ESG considerations as a component of portfolio construction.
Originally established as a risk-advisory function, the Fundamental Factor Team built an extensive factor platform and has evolved into a client-solutions partner. Focusing solely on factor-based investing and research, the team has access to over 350 building blocks for portfolios, using Wellington’s diverse investor pool as well as the team’s own proprietary factors.
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