In summary, factor investing is an investment approach that involves targeting quantifiable factors that can explain differences in security returns. Momentum is the one of the five most widely accepted factors, with its focus on securities that have performed well over recent time periods.
A sustainable investing approach can be used as an additional lens through which a factor-based strategy can be deployed, and there are currently significant developments occurring in the regulatory regime around sustainable investing in the UK, through the FCA’s SDR and investment labels regime.
This article concludes the wider series covering factor investing. If you are looking for a book on the subject of factor investing then Your Complete Guide to Factor-Based Investing by industry pioneers Andrew Berkin and Larry Swedroe is a great place to start. We wish you all the best in your factor investing journey.
Jonathan Griffiths is an investment product manager at EBI Portfolios