Tag

#Factor Investing

2 articles

Finance

3 Factors Explain 90% of Stock Returns

A 1993 study by Fama and French revealed that market risk, company size, and value characteristics explain about 90% of stock portfolio return differences. This three-factor model revolutionized finance by reframing anomalies as systematic risks. It underpins modern factor investing strategies and low-cost investment products.

4 weeks ago
Finance

Equal Weight Funds: A Deeper Look at Risks

Equal weight index funds appear attractive for mitigating market concentration and high valuations, but they come with significant risks including higher volatility, increased turnover, and a systematic drag on momentum. Investors may find more efficient ways to achieve desired factor exposures.

2 months ago