The Case for Multi-Factor Investing in Economic Recovery
However, advisors and investors considering factor-based strategies should remember that factors, just like individual stocks, go through ups and downs. QDYN is useful because it’s not dependent on a single factor – an appealing trait at this stage in the economic recovery.
“Our analysis suggests that the current economic recovery has prompted factors like value, size and dividend yield to outperform, which has been consistent with past historical recoveries,” according to FlexShares research.
With QDYN, Rates Matter Too
As 2021 plays out, it’s becoming evident that rising Treasury yields affect some factors more than others. QDYN’s solid year-to-date showing indicates it’s properly positioned for what could be a tricky factor environment due to rising interest rates.
December 18, 2020
Expectations are in place that 2021 will be far kinder to dividends and payout growth than this year has been. Investors can position for that improving outlook with exchange traded funds such as the
QDYN’s underlying index targets management efficiency or quantitative evaluation of a firm’s deployment of capital and its financing decisions. By using a management efficiency screen, the index can screen out firms that aggressively pursue capital expenditures and additional financing, which typically lose flexibility in both advantageous and challenging partitions of the market cycle.
“Considering how bad things looked for dividends earlier in the pandemic, 2020 has turned out to be a serviceable year for equity income investors, after all. Even better: 2021 should get back on track and bring rising dividends and more stock buybacks,” reports Lawrence Strauss for