The Rise of Factor Investing

Sep 06, 2022, 12:08PM ISTSource: THE ECONOMIC TIMES

Every 4 decades, the world of investing experiences a significant shift. In the 1930s, it was value investing that brought with it a data-driven information-led approach to valuing companies. In the 1970s, passive investing via index funds and ETFs gained popularity and in the last decade or so, we are seeing the emergence of factor investing which marries active and passive investing in one potent package. Now globally financial products linked to factor investing manage over 1.2 trillion dollars in assets which is clearly a big number. And while this number is far ahead of what we have in India, the last 12 to 18 months has seen the introduction of a number of factor-based schemes in the ETF and index fund variants. Source ET Money, download the app here.