Scientific Beta

ETF Stream: "In Shirbini’s view, the best way to invest in factors is to create a “well-diversified factor strategy”, which involves minimising stock-specific risks using a combination of equal weighting, equal risk contribution to each stock, and reducing correlations between holdings. This is the approach Scientific Beta takes to constructing multi-factor indices."

ETF Stream 13/05/2021

"(...) As a result, the question of whether factor timing works in practice has cropped up once again, and opinions on the subject differ. For some, like Eric Shirbini, global product specialist at ERI Scientific Beta, the answer is a resounding ‘no’, while others are more optimistic about the potential benefits of timing factors. As Shirbini said: “Factors are related to risk premia and who can time that? It is very difficult to predict and respond to changing macro-economic conditions. The only sensible solution is to invest in a portfolio of factors with equal exposure to each.” (...) In Shirbini’s view, the best way to invest in factors is to create a “well-diversified factor strategy”, which involves minimising stock-specific risks using a combination of equal weighting, equal risk contribution to each stock, and reducing correlations between holdings. This is the approach Scientific Beta takes to constructing multi-factor indices. (...)"