This article is part of Morningstar's Guide to Passive Investing special report.
Multifactor funds imitate active strategies that have been successful in the past and reduce risk by diversifying across those that tend to work at different times. They charge much less than traditional active managers and follow a set of predefined rules, eliminating key-person risk. These are all desirable traits.
Alex Bryan, CFA has a position in the following securities mentioned above: INTF VFMF. Find out about Morningstar's editorial policies.