Factors Of Higher Returns
Factor Investing – Investment strategy in which securities are chosen based on attributes that are associated with higher returns.
Size: Investing in smaller companies offer higher expected returns than investing in larger companies.
Value: Value companies (low price/book) offer higher expected returns than growth (high price/book) companies.
Profitability: Companies with higher profitability, ratio of book-value to market-value, have higher expected returns.
Market
“The stock market is a device for transferring money from the impatient to the patient.” Warren Buffet
Value
Nobel Prize winning research shows value stocks have historically outperformed the market by 5% since 1926.
Size
Nobel Prize winning research shows small company stocks have historically outperformed the market by 3% since 1926.
Profitability
Academic research shows profitability based investing can increase returns.
Value Premium
Size Premium
Profitability
Emotional Behavior
High Fees
Market Timing
Every WiseFactors portfolio is designed and diversified to minimize volatility and provide overall risk-adjusted returns superior to investment in any single asset class. Public equity markets are very efficient: they are unpredictable over the short term, but steadily increase in predictability over time.
Market
Historically, equities trump bonds, cash and every other investment vehicle.
Size
WiseFactors offers investors diversified, cost efficient access to small companies.
Value
Research shows that market, company size, and relative stock price drive returns. Historically, value stocks outperform growth stocks.
Profitability
Expected direct profitability, gauged by gross operating margin, is also a proven indicator of higher expected returns.
Higher Returns Over Time
WiseFactors incorporates factor investing to globally diversified portfolios to increase returns.
Benefits of Factor Investing
Our portfolios have higher exposure to the small and value stocks to capture the higher expected returns from these factors.
$10,000 Invested From 1970-2017
