Factors to Consider for Better Equity Returns
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Success of equity portfolio, like movies, depends on multiple factors - market cap, momentum, value, quality, volatility
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Market cap approach has high liquidity but limited diversification and mostly allocates to large discovered stocks
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Factor strategies classify and select stocks based on specific metrics like momentum, low volatility, value, quality
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Different factors outperform in different market cycles; multi-factor investing reduces risks
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Factor-based indexes can complement active/passive equity investing for better risk-adjusted returns