Scientific Beta

Enterprising Investor forum, CFA Institute: "Is it possible to retain the benefits and economically sound basis of a factor approach to equity investing while more closely aligning a factor portfolio’s performance with a cap-weighted benchmark?"

Enterprising Investor forum, CFA Institute 14/07/2023

Article by Joseph Simonian, PhD, senior investment strategist at Scientific Beta

"(...) Despite a brief return to normalcy in 2022, equity factor strategies have experienced performance challenges relative to cap-weighted indexes since the COVID-19-induced market crash of 2020. While there are many explanations for these challenges, our focus here is on another question: Is it possible to retain the benefits and economically sound basis of a factor approach to equity investing while more closely aligning a factor portfolio’s performance with a cap-weighted benchmark? (...)"