What is factor investing ? It’s a portfolio strategy targeting

What is factor investing? It’s a portfolio strategy targeting specific drivers of returns such as value, momentum, size, and quality. Recent S&P 500 data shows momentum factors outperforming year-to-date, up 7.4% versus value at 3.2%, hinting at trend-following opportunities in tech-heavy sectors. The firm brings over five decades of factor investing experience to bear in their strategies. Fidelity offers a total of 15-factor strategy ETFs, including two fixed income and 13 equity offerings. The Fidelity factor-based ETF suite encompasses a total of $6.9 billion in AUM as of 02/29/2024, according to the fund fact sheets . For example, the Invesco S&P 500 Equal Weight ETF (RSP) includes the same exact companies as the S&P 500, but holds them such that each is about 0.22% of the ETF. Conversely, as of October 2024, Apple (AAPL), which is the top company in the world by market cap, represents 6.9% of the the S&P 500. That means a big rally or selloff in Apple shares would have an outsize impact on the S&P 500, but in an equal-weighted S&P 500 ETF, it would have the same 0.22% impact as any other stock in the ETF. What is factor investing? Correlation data shows momentum and quality factors have aligned, producing stronger risk-adjusted returns than index-tracking ETFs in 2024’s volatile sessions.