Tom Goodwin, Senior Research Director and Guillermo Cano Senior Product Manager, Russell Indexes
Introduction/description of topic
What? Factor-investing, or factor-based equity allocations, are entering the mainstream of the investment conversation. But investors are faced with ‘noise’ in the smart beta arena, including uncertainty around how smart beta can solve investment problems, and the differences between ‘smart beta’ and ‘factor’ indices that have exploded onto the scene. So where do they begin?
Why? If investors have a desire to tilt portfolios towards strategies that can potentially both tolerate market volatility and generate long-term positive returns, exploring how factor-based equity allocations can help achieve these investment objectives is a good place to start.
How? Practical implementation of exposures to these factors raises a new set of questions such as how to efficiently capture the desired factor exposure(s) while being mindful of turnover and capacity, and how to maintain a well-diversified portfolio.
This Russell Indexes’ webcast seeks to guide investors through these complexities. We will illustrate how we’ve cut through the noise to focus on what our research has shown to be the most important and complementary factors for portfolio construction: low volatility, value, quality and momentum. We will also provide examples of how factor combination portfolios can align with investor beliefs, preferences, and constraints.