The Future of Factor Investing

A recent article in Advisor Perspectives offers a number of insights regarding factor investing: Data mining, it argues, represents a “huge risk” in factor-based investing. “Many factors have proven to not work in practice and even the most popular factors, like value and momentum, may prove less effective going forward.” With investing, the article argues, “true relationships can be hard to see because of randomness and noise in data, and there’s a risk we convince… Read More

Smart Beta Investing May Not Be So Smart

A new study has raised questions as to whether smart beta mutual funds, which are on course to reach $1 trillion in assets by the end of 2017, are as “smart as they claim to be,” according to a recent article in the Financial Times. The article quotes University of Finland finance professor Antti Suhonen, who led the research, from his report (published in May): “Investing in smart beta does require good investor education, due… Read More