2 Multifactor ETFs for Active Risk-Takers
These strategies tilt toward factors that have beaten the market over time.
Alex Bryan: Investors hoping to beat the market with index funds have a couple of different multifactor funds to choose from. The case for multifactor funds really boils down to a case for diversification, trying to spread your bets out across several different investment styles that have tended to work over time.
The multifactor fund that you choose really boils down to how much active risk you want to take. Investors who are looking to limit their active factor bets might consider something like Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF, GSLC. This is a fund that takes very modest style bets. It targets stocks that have strong momentum, value, quality, and low-volatility characteristics.
Alex Bryan does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.