Harnessing the power of factors

What are the factors?

Rooted in academic research, factors refer to persistent, pervasive characteristics that drive the returns on stocks, bonds and other asset classes.

This idea stems from the theory that portfolio returns can be explained by two main types of factors: macro and style. Macro factors explain broad returns across asset classes, and style factors explain returns within asset classes.

A common way to access factors is through rules-based ETFs (often referred to as “Smart Beta”).

Factor strategy

Single factor (New)

Factor / objective

Value
Invests in stocks that are inexpensive relative to fundamentals.
Quality
Invests in companies with strong fundamentals.
Momentum
Invests in stocks on an upswing.
Size
Invests in smaller, more nimble companies.

Minimum volatility

Factor / objective

Volatility

Invests in stocks that have collectively exhibited lower volatility.


Product information

Learn more View all iShares Edge Minimum Volatility ETFs

Multi-factor

Factor / objective

Various

Invests in a diversified portfolio of factors.


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Learn more View all iShares Edge Multifactor ETFs

Active multi-factor

Factor / objective

Various

Invests in stocks that have collectively exhibited lower volatility.


Product information

Learn more View all RBC active multi-factor ETFs