In Factor Investing, Integration is a Plus

Portfolio diversification is a known strategy for minimizing risk, but these efforts can be thwarted if the diversified securities react in a similar way to market conditions. Factor investing is designed to reduce this risk by adjusting holdings based on specific attributes, and returns have been shown to increase if several factors are combined. A recent article in Chief Investment Officer magazine asserts that how factors are combined also makes a difference in investment outcomes.… Read More

Factor Investing is Gaining Appeal

Many traditional investment portfolios are created by mixing asset classes to spread risk and optimize returns. However, the Financial Times recently reported on a growing shift by more sophisticated institutional investors toward a different approach referred to as “factor investing”. The idea behind factor investing is to break down securities into the fundamental issues that drive their returns, a methodology which requires investors to take a more granular approach than they would by selecting broader asset… Read More