Factors – The Foundations Of Investing

Factors are the foundations of investing that define the broad drivers of returns across asset classes. Investing in factors can help improve portfolio outcomes, reduce volatility and enhance diversification. In a recent discussion with Outlook Money, Umesh Kumar Daila, head – ETF sales, Mirae Asset Investment Managers India Pvt Ltd, demystified factor investing, the strategies one should adopt while opting for factor-based investing, and the typical asset allocation one should follow. He was in discussion with Sutirtha Sanyal, assistant editor, Outlook Money. Here are some edited excerpts from the discussion. Could you help our viewers understand factor investment strategy? Factor investing is an investment strategy where the stocks are selected based on well-researched attributes, which help in terms of growth or returns. For instance, selecting a stock based on lesser...