Quit Factor Timing Already: Multi-Factor Model Portfolios April 1, 2021
Timing individual investment factors is difficult, but some advisors and clients still try to do it. There are easier ways of deploying factor-based strategies.
“This model portfolio is designed for investors with a long-term horizon looking for exposure to a broad universe of U.S. equities primarily using factor focused ETFs. The selected ETFs provide certain factor tilts that have the potential to generate excess return relative to comparable cap-weighted benchmarks over longer-term holding periods,” according to WisdomTree.
Multi-factor strategies are beneficial to both advisors and clients.
“Multifactor funds are sound in theory. They target stocks with characteristics that have historically been associated with market-beating performance, also known as factors,” notes Morningstar analyst Alex Bryan. “Just as it’s prudent to diversify across asset classes, sectors, regions, and securities,
March 15, 2021
Value stock ETFs are rebounding, but that doesn’t mean advisors need to go ‘all in’ on the investment factor.
Consider the U.S. Multi-Factor Model Portfolio, which is part of WisdomTree’s Modern Alpha series of model portfolios. This selection may be a bargain foundation for some, but it’s not just pure value exposure.
“This model portfolio is designed for investors with a long-term horizon looking for exposure to a broad universe of U.S. equities primarily using factor focused ETFs. The selected ETFs provide certain factor tilts that have the potential to generate excess return relative to comparable cap-weighted benchmarks over longer-term holding periods,” according to WisdomTree.