The debate of active and passive investing has been raging on. Smart Beta or Factor Investing pulls out the best of both worlds.
The active funds have not been able to outperform the index on a consistent basis.
A huge influx of liquidity caused the top stocks cornering a lion’s share of the total market capitalization.
And so, the passive funds which were copying the index became a no-brainer.
However now, there is a felt need of better risk adjusted returns which has led to the trend of factor investing or smart beta funds.
Factor investing is basically focus on a few factors like quality, value, momentum, volatility, alpha, etc for selection of stocks. The powerful
algorithms at work behind this make it easy to do the number crunching.
Multi-factor fund management helps to achieve higher risk adjusted returns. They help the investors to remain invested for longer periods due to
Read more on Smart Beta Factor investing: Investopedia
MOMENTUM – SINGLE FACTOR
Momentum is one of the most popular factor in equity markets.
- Wright Momentum is one of the portfolio which is designed to invest in trending stocks.
This is a great strategy for bull markets.
The portfolio has around 25 stocks consisting of high quality, high momentum and low volatility.
This portfolio is rebalanced every month.
- You can invest in this portfolio here: Momentum Investing
BALANCED MULTI-FACTOR TACTICAL
Dynamic asset allocation based on mutiple tactical factors is another strategy.
- In bearish or range bound markets, it gives a better risk adjusted return.
The balanced portfolio has a mix of equity, bonds and gold.
The asset allocation is dynamically adjusted as per the market trends.
Bonds and Gold are traded through ETFs while stocks are selected on multiple factors like momentum, value, growth and quality.
- You can invest in this portfolio here: Balanced Multifactor
Contact us for more details.