The progress of science and, specifically, technology is spectacular across various industries, from blockchain technology to aerospace technology to quantum computing.
If technology has the capability to support driverless cars, some simple questions may come to the mind of investors.
Can one create an investment portfolio using technology?
Can one find a winning stock for the next decade using technology?
Needless to say, technology has advanced in the field of constructing investment portfolios as well, popularly known as Factor Investing, Quant-based Investing or Smart Beta Investing.
Factor Investing replaces discretionary management by a portfolio manager with effective and efficient use of relevant technology and rules. It is nothing but a confluence of sound investment principles, statistical concepts and data analytics embedded in a software program which constructs the investment portfolio.
Factor Investing has gained popularity, momentum and greater investor acceptance in developed markets, especially after the global financial crisis. Only ETFs using this approach are estimated to manage over USD 1.60 tln. in the US alone1 .
NJ Asset Management has participated in the evolution of investment management through a systematic rule based approach with effective use of technology over the last decade in India. We believe that an appropriate scientific approach to investing with a strong technology foundation has a high likelihood of success.
As such, NJ Asset Management has dedicated itself to work in the field of rule based active investing through the efficient use of research and technology, thereby eliminating individual biases and inculcating discipline.
I am pleased to launch the first edition of NJ’s Factor Book a comprehensive demonstration of the new world of Factor Investing and the compilation of the insights and analysis of the research conducted by NJ Asset Management research team on various factors in India.
Let me end by expressing our gratitude for the overwhelming support we received in our first NFO viz NJ Balanced Advantage Fund. NJ Asset Management is passionate, dedicated and committed to this new avatar of investment management viz FACTOR INVESTING.
Mr. Neeraj Choksi
Director & Chairman - NJ Asset Management Private Limited
1This Figure represents the total assets under management (AUM) of the 1,219 Smart Beta Exchange Traded Funds (ETFs) listed in the United States as of March 2022. Source: ETF.com