Hang Seng Indexes Company has expanded its smart beta index series by launching two multi-factor indices. These are the Hang Seng Large-Mid Cap Equal Weighted Factor Mix Index and the Hang Seng Large-Mid Cap Risk Parity Factor Mix Index.

A smart beta strategy helps investors to construct investment portfolios using a systematic, transparent and cost-effective method of stock selection, weighting and rebalancing based on factors that demonstrate different risk-return characteristics. The new multi-factor indices, the first of their kind to be constructed by the company, aim to combine the single-factor indices by adopting a top-down approach to achieve the desired factor exposures.

Using the Hang Seng Large-Mid Cap (Investable) Index as the applicable universe, the two new indices provide exposure to four widely adopted factors – quality, value, low volatility and momentum.

The Hang Seng Large-Mid Cap Equal Weighted Factor Mix Index enables an equal contribution in terms of weight from each single-factor index, while the Hang Seng Large-Mid Cap Risk Parity Factor Mix  Index enables an equal contribution in terms of risk from each single-factor index. The new indices are calculated and disseminated in real-time at two-second intervals.