Introduction to factor investing series - Six common factors explained

Unlike traditional stock picking, factor investing builds on exposures to particular traits (called factors), that exhibit superior returns relative to a broad market-capitalisation weighted index benchmark.

Apr 12, 2017 | Invesco

A factor can be thought of as a quantifiable characteristic of a financial asset which to a large part explains the return and risk characteristics of a portfolio.

Six common factors include Value, Size, Momentum, Volatility, Dividend Yield and Quality. These common factors have all been found to produce superior returns compared with market-weighted indices over time.