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Multi-Factor Investing, Demystified: Part 1

By Advisor Perspectives
Financial Services

$1 trillion dollars. According to The Economist, that’s the amount of money invested in factor-based strategies worldwide today.1 Ten years ago, factor investing was just a fringe activity. Today, it has surged in popularity, as more and more investors seek ways to unearth additional returns.

Despite its rapid rise, however, there remains confusion over what specifically multi-factor investing entails—and exactly how it can help boost returns.

To drill into this deeper, I recently sat down for a chat with two of my colleagues, senior portfolio managers Jon Eggins and Nick Zylkowski, who have helped write the book at Russell Investments about multi-factor investing. We explore the topic up close in the latest episode of our Deep Dive podcast series, Multi-factor investing, demystified. Here’s a recap of the first part of our conversation, answering the frequently asked questions such as: What is a factor? What are some common factors? What is multi-factor investing? Why is multi-factor investing so popular today? The rest of our conversation, which we’ll summarize in another blog post, focused on some of the stumbling blocks seen in multi-factor investing, as well as the skills we view as instrumental to carrying out this approach successfully. Check out the podcast for the full conversation.

Read more at Advisor Perspectives.

Photo: CafeCredit.com

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