Reap the rewards of ‘factor investing’

One of the biggest buzz phrases in investment today is ‘factor investing’ (or ‘smart beta’). Exchange-traded funds (ETFs) based on this strategy have pulled in huge amounts of money over the last few years and now hold almost $400bn in assets, according to JP Morgan. That’s up more than 200% in the last five years – and if anything, inflows are accelerating as these funds go mainstream. So what is factor investing and why is it taking off?

Beating the market

Factor investing means looking for specific characteristics (factors) shared by groups of stocks that make them more likely to [...]

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