FYI: The rise of smart beta–or more broadly, factor investing–has coincided with a 6 year period of zero interest rates. During this period, factors have been particularly ineffective relative to longer term results. Using publicly-available data (Ken French) we can explore the recent results for the most popular stock selection factors and compare them to longer-term periods of both rising and falling rates.
While Ken French publishes a wealth of useful data, the most important are data on “core” stock selection factors: book/price (value), size, operating profitability + investment (quality), and momentum (price trend). These are the factors that launched a thousand (ETF) ships.
Regards,
Ted
http://investorfieldguide.com/zirp-and-the-factors-that-launched-1000-etfs/
