Can you build a better portfolio in just 3 steps?
Factor investing offers the potential for enhanced returns and greater diversification—but it’s not all rainbows and butterflies. In this video, we walk through how investors can approach building robust, long-only factor portfolios using data and research-backed insights.
We explore four primary factors—value, momentum, size, and profitability—using data from the Kenneth French Library, examine how each factor has performed historically, which combinations may offer better diversification for index investors, and what role conviction plays in portfolio construction.
Timestamps:
00:00 – Intro/ Building factor portfolios
00:30 – Why factor investing?
01:57 – Historical performance horse race
03:55 – Factor correlations... Diversify!
04:43 – How much to invest in factors
5:15 – Outro
Sources:
Kenneth French Data Library:
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