'Premia' Funds Push Into the European Fund Market

These quantitatively managed funds come in many forms. Investors should understand their differences.

Matias Möttölä, CFA 04.05.2018 | 14:35
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'Premia' Surpasses 'Factor' as a Selling Point in 2017

The world of investing is driven by buzz words. Currently, one of the hottest labels is “premium” (or “premia,” its plural). In 2017, 27 funds launched in Europe with “Premia” in their name. Another two have come out of the gates in 2018 through 25 April, and more will surely be launched.

“Premia” even surpassed the popularity of another quantitative finance concept: "factor." There were 17 funds launched with "factor" in their name in Europe last year.

The notion of premia is taught in finance theory classes and is used most widely by quantitative specialists to describe the expected return of different investments. Premia are typically estimated as a combination of historical returns and current economic conditions, valuations, and instrument-specific technical attributes.

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Om forfatteren

Matias Möttölä, CFA

Matias Möttölä, CFA  Matias Möttölä er redaktør på Morningstar.fi og Manager Research Analyst for Morningstar.

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