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3 things you should know about factor investing

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Factors are broad, persistent drivers of returns that have been proven to add value to portfolios over decades, in accordance to research data from Dartmouth College . Factor strategies like smart beta capitalize on today's advancements in data and technology to give all investors access to time-tested investment ideas, once only accessible to large institutions. As factor strategies continue to gather attention, some misconceptions have arisen. I am highlighting-and clearing up-a few here today.

1. Factor strategies are stocks-only.

fixed income factors

2. Factor investing is unnecessary because my portfolio of stocks, bonds, commodities, hedge funds and real estate is well diversified.

3. Factor investing is a passive investment strategy.

online resources Sara Shores is Global Head of Smart Beta for BlackRock and a regular contributor to The Blog .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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