Schroders launches bespoke multi-factor active equity index for institutional market

Index will follow the process of the firm’s sustainable multi-factor equity fund

Jonathan Stapleton
clock • 1 min read
James Barham: The index delivers an actively managed approach to target outperformance

James Barham: The index delivers an actively managed approach to target outperformance

Schroders has launched an active developed markets multi-factor index with a sustainable focus for institutional investors.

The asset management firm said the strategy - the Schroders Developed Markets Managed Multi-Factor Index - effectively followed the investment process of its sustainable multi-factor equity fund, a strategy launched in 2018 which integrates ESG data into a quantitatively-driven investment approach.


The index aims to outperform the Bloomberg Developed Markets Large & Mid Cap Index by optimising the exposure to five factors - value, profitability, momentum, low volatility and ESG. It also seeks to reduce investors' carbon footprint exposure by 50% relative to the parent index and pursue an exclusionary investment policy.

It incorporates Schroders' SustainEx investment framework which aims to put a dollar price on the social costs and benefits companies generate. One of Schroders' defined benefit clients has already opted to allocate a proportion of its portfolio to this new index.

Schroders Solutions chairman James Barham said: "Off the shelf ESG indices can be difficult to compare while market cap indices can lead to potential factor concentration risks. This ground-breaking index delivers an actively managed approach to target outperformance for our institutional clients compared with traditional benchmarks."

More on Investment

Michael Walker, Associate Partner at Aon

Industry Voice: The golden ticket

The importance of member communication when de-risking your scheme

Michael Walker, Associate Partner at Aon
clock 02 June 2023 • 3 min read
Aegon UK chief investment officer Tim Orton

Aegon presses for 'bold climate action' imminently

Also set a £500m AUM target for investments in climate solutions in defaults by 2026

Holly Roach
clock 01 June 2023 • 1 min read
Chancellor Jeremy Hunt is reported to be considering PPF remit expansion. © Zara Farrar - HM Treasury

Government mulls PPF 'master consolidator' remit for pension schemes

Proposals could give flexibility for the sponsors of smaller and struggling schemes

Jonathan Stapleton
clock 26 May 2023 • 4 min read