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When Factors Underperform (& What to Do)

As with any investing, factors go through cycles. Here, Melinda Mecca quantifies these cycles and offers tips on dealing with them.

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Our research shows that equity factors have unique cycles. For example, low volatility can last 12 months whilst value can stretch to 47 months. This can be addressed by focussing on factors with cycle lengths less than your investment time horizon, or, by combining various factors, especially when it comes to high quality.

To learn more, download our latest research paper “Foundations In Factors”

This material is directed to eligible counterparties and professional clients only and should not be relied upon by retail investors. The information is not intended for distribution or use by any person in any jurisdiction where such distribution would be contrary to local law or regulation. Northern Trust and its affiliates may have positions in and may effect transactions in the markets, contracts and related investments different than described in this information.

Investing involves risk- no investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. Simulated past performance and actual past performance is no guarantee of future results.

Northern Trust Asset Management is composed of Northern Trust Investments, Inc. Northern Trust Global Investments Limited, Northern Trust Fund Managers (Ireland) Limited, Northern Trust Global Investments Japan, K.K, NT Global Advisors Inc., 50 South Capital Advisors, LLC and investment personnel of The Northern Trust Company of Hong Kong Limited and The Northern Trust Company.

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