{"id":5694485,"date":"2020-10-04T06:30:50","date_gmt":"2020-10-04T06:30:50","guid":{"rendered":"https:\/\/stockviz.biz\/index.php\/2020\/10\/04\/factors-buy-all-of-them\/"},"modified":"2021-09-14T08:33:28","modified_gmt":"2021-09-14T03:03:28","slug":"factors-buy-all-of-them","status":"publish","type":"post","link":"https:\/\/stockviz.biz\/index.php\/2020\/10\/04\/factors-buy-all-of-them\/","title":{"rendered":"Factors: Buy All of Them"},"content":{"rendered":"\n

Can’t decide between quality, low-volatility, high-alpha? Why not buy all of them?<\/h2>\n\n\n\n

Our previous post<\/a> discussed how you can use the historical performance of different factors to avoid falling into a factor-trap. However, can factor investing be further simplified?<\/p>\n\n\n\n

The NSE Strategy Indices<\/h2>\n\n\n\n

The NSE has published a whole library of factor indices. Some of them are pure<\/em> factors – like quality, low-volatility, etc – and some are hybrids<\/em> – like alpha-quality-low-volatility (sort of like a shampoo-conditioner-face-wash 3-in-1.) You can explore their website<\/a> if your curious.<\/p>\n\n\n\n

The question is, what if you just took quality, low-volatility and high-alpha (a proxy for momentum) and just equal weighted it? Why choose when you can have all? This is the essence of the Multi-Factor approach to factor investing.<\/p>\n\n\n\n

Equal-weighted Factor Portfolio<\/h2>\n\n\n\n

Even if you did a quarterly rebalance, you did better than NIFTY 50.<\/p>\n\n\n

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