The wages of sin are healthy profits

A recent study has looked into which industries do better over the long term. The results, says Cris Sholto Heaton, are interesting.

The rise of 'smart beta' investing has led to explosive growth in research into what drives stockmarket returns. Smart beta means identifying factors that seem to explain the performance of different investments, such as value (cheap stocks outperform expensive ones on average) and size (small stocks outperform larger ones on average).

Literally hundreds of factors have now been tested: one recent study* compiled a list of 316 drawn from other research papers. Most of these turned out to be of minimal value when retested; only a few genuinely seemed to be associated with better returns.

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Cris Sholto Heaton

Cris Sholto Heaton is an investment analyst and writer who has been contributing to MoneyWeek since 2006 and was managing editor of the magazine between 2016 and 2018. He is especially interested in international investing, believing many investors still focus too much on their home markets and that it pays to take advantage of all the opportunities the world offers. He often writes about Asian equities, international income and global asset allocation.

Cris began his career in financial services consultancy at PwC and Lane Clark & Peacock, before an abrupt change of direction into oil, gas and energy at Petroleum Economist and Platts and subsequently into investment research and writing. In addition to his articles for MoneyWeek, he also works with a number of asset managers, consultancies and financial information providers.

He holds the Chartered Financial Analyst designation and the Investment Management Certificate, as well as degrees in finance and mathematics. He has also studied acting, film-making and photography, and strongly suspects that an awareness of what makes a compelling story is just as important for understanding markets as any amount of qualifications.