12 March 2024
BBVA Quantitative Investment Strategies: a commitment to innovation and excellence in the financial markets
This quantitative investment line of BBVA CIB offers innovative and efficient solutions for investors through mathematical rules, processes and robust technology, with the aim of optimizing portfolio returns and reducing risk.
Today's financial markets are characterized by their complexity and dynamism, driven by globalization and the new developments in financial technologies. In this environment, investors are constantly looking for innovative and efficient solutions that can adapt to their changing needs.
What are quantitative investment strategies?
Quantitative Investment Strategies ("QIS") are an alternative way of investing based on pre-defined rules and contained within indices. By combining the best of active and passive investing, it allows investors to capture alpha in a cost-efficient, diversified and transparent way.
In order to meet the demands of investors in this regard, BBVA CIB took the decision in 2020 to create its own Quantitative Investment Strategies (QIS) business line, focused on developing and offering a wide range of products and services based on mathematical rules and historical and quantitative analysis, all developed by a team of quantitative finance experts. Within QIS are equity, interest rate, foreign exchange, credit and multi-asset indices, which replicate the behavior of different risk factors such as value, momentum, quality, size and volatility. These indices can be used as a benchmark for passive or active fund management, or as an underlying asset for the issuance of structured products.
These investable indices can be classified into different types according to the purpose of the investment and the factors they seek to capture. BBVA CIB's offer is structured in the following categories:
- Alternative risk premiums: these are indices that seek to isolate and capture the excess return resulting from exposure to specific risk factors, such as Trend, Carry and Value.
- Thematic investment: indices that provide exposure to the most pertinent megatrends as well as to specific asset characteristics, such as ESG, disruptive technology, energy transition, the future of healthcare, urbanization or multi-trends.
- Based on core factors: these indices are designed to enhance diversification, provide exposure to specific factors, generate above-market returns over the long term and manage risk through exposure to core factors: Growth, Value and Quality.
In addition, BBVA QIS can create tailor-made indices, which are developed jointly with customers, to meet their specific investment needs. These indices can be a combination of existing products offered or they can be built completely from scratch to suit the customer's requirements.
BBVA QIS is one of the BBVA Corporate & Investment Banking initiatives that reflects the bank's commitment to innovation and excellence in the markets. With this offer, BBVA CIB expands its product range for investors and positions itself as a benchmark in the field of quantitative investment strategies, both in Europe and in the Americas, where the bank has recently expanded its activity. Mexico was the first geography in the region to incorporate these innovative strategies into local investment products, followed by Peru, Spain and the rest of Europe.
Pablo Suárez, Global Head of BBVA QIS, explains: "With this expansion, BBVA seeks to offer investors tailored investment solutions adapted to their risk and return objectives, taking advantage of BBVA Group's local knowledge and global experience".