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A Practical Guide to Evaluating Multifactor Funds

Multifactor funds attempt to diversify portfolios across two or more risk factors that can help explain and predict returns, such as value or momentum.

The argument for factor diversification is simple, but that doesn’t mean choosing a multifactor fund is easy.
Despite their popularity, these funds have had mixed results. Is the sum greater than the parts?

e examine the key drivers of global multifactor fund performance and discuss simple ways to evaluate their long-term merit.

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Research Library A Practical Guide to Evaluating Multifactor Funds

What's Inside our Research:

  • An evaluation of multifactor funds that have performed well over the years and insight into why others have struggled.  
  • Five battle-tested risk factors historically linked to strong performance. 
  • Which data points can help identify the multifactor funds that should outperform in the future. 
  • How investors should consider risk factor exposures. 

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