Factor investing is all the rage, but many financial advisors are still unsure of its benefits. Factors such as value, momentum, size, minimum volatility, and quality are well-documented as robust and persistent across markets over time. Advisors and investors alike must now determine how to harness some of the latest ETF innovations to deliver better outcomes in their portfolios.
While there are many academic studies available, there is still much to be understood in regards to the key selling points and long-term benefits of incorporating factor investing into broader investment portfolios. Below is a quick look at a few strategic reasons advisors should consider making the move into factor-based ETFs.