In focus - Thought Leadership

Five factor investing mistakes - and how to navigate them

It's not been plain sailing for factor investing in recent years, but we've identified some ways to improve the chances of its success.

15/10/2019

Lesley-Ann Morgan

Lesley-Ann Morgan

Head of Multi-Asset Strategy

Ben Popatlal

Ben Popatlal

Multi-Asset Strategist

It’s been a tough period for factor investing. Heralded as the answer to cheap portfolio construction, efficient portfolio management and a simple way to remove unintended factor exposure, factor portfolios have not been performing the way everyone expected.

In this paper, available as a PDF at the foot of the page, we highlight some of the common mistakes to avoid based on our own experience, and how to manage them:

  • Mistake #1: Factors no longer work
  • Mistake #2: Using too many factors
  • Mistake #3: Being too cute when you combine factors
  • Mistake #4: "The back-test told me to do it"
  • Mistake #5: A factor completion portfolio might compete rather than complete

Find out more in our full paper below.