Scientific Beta

Enterprising Investor forum, CFA Institute: "The year 2022 was a memorable one for investors, but for not altogether positive reasons. One bright spot, however, was the relative outperformance of equity risk factors versus other popular equity investing styles. While the financial media has attributed recent strong factor performance almost entirely to the Value factor, the resurgence of factor performance was in fact much broader."

Enterprising Investor forum, CFA Institute 31/03/2023

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

"(...) Factors are the primary market drivers of asset-class returns. In the equity realm, only a limited set of rewarded factors are backed by academic consensus: Value, Size, Momentum, Low Volatility, High Profitability, and Low Investment. These factors compensate investors for the additional risk exposure they create in bad times. Hence, factor strategies are appealing to investors because they provide exposure to rewarded risk factors in addition to market risk and can be a source of superior risk-adjusted performance over the long term compared with cap-weighted benchmarks. The year 2022 was a memorable one for investors, but for not altogether positive reasons. One bright spot, however, was the relative outperformance of equity risk factors versus other popular equity investing styles. While the financial media has attributed recent strong factor performance almost entirely to the Value factor, the resurgence of factor performance was in fact much broader. (...)"