Equity Multi-Factor Investing

Fadi Zaher ()
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Fadi Zaher: Index Solutions & Investment Specialists

Chapter 9 in Index Fund Management, 2019, pp 151-169 from Springer

Abstract: Abstract A multi-factor approach is an evolution of single-factor investing and has its root in academia. It aims to diversify the factor exposure by reducing the reliance on any single factor style. This chapter offers the final voyage on traditional equity factor investing with focus on multi-factor strategies. This chapter presents frameworks on how single-factor styles can be combined for short, medium and long-term investors. Multi-factor strategies among index providers and asset managers vary to a great extent, and so does their complexity. The challenges to investors revolve around determining which factors to allocate, how many to include and what approaches to employ in the index construction. There is no silver bullet for a multi-factor combination or design approach, and there are many advocates for one over another. The bottom line is—multi-factor investing today is an art and not just a precise exercise.

Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-19400-0_9

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DOI: 10.1007/978-3-030-19400-0_9

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