Factor investing

Last Update: 09/06/2024

Investing using factors means exploiting certain properties of stocks that can generate extra profits compared to the benchmark index. Momentum, low volatility, quality are among the best known and most widely used factors. Much research has shown that there is a relationship between factor investing and the business cycle. This means that investors can use information on economic trends to choose which investment factor to focus on. And, using the reverse reasoning, from investors’ choices we can understand something about country’s business cycle. In our analysis, we try to identify which factors are performing better and what trends are taking place. We also included ESG among the factors analysed.