Singapore, Dec. 8 -- WHAT DOES IT MEAN?
Factor investing is a way of creating a portfolio by focusing on underlying themes, or factors, that drive investment returns and risks. Most investors already use factors without realising it.
Academic studies have identified a number of company characteristics, or factors, that influence the performance of stocks.
Examples include companies that have attractive valuations relative to their fundamentals (value); companies with higher profitability, greater stability and better composition of earnings (quality); companies that pay higher dividends (yield); and stocks with better historical performance (momentum).
Many investors select stocks with these characteristics or follow the advice of a...