FYI: Key Points
.The diversified approach of a multi-factor strategy offers a “smoother ride” through economic and market cycles than a single-factor strategy.
.Investors should consider both the quantitative and qualitative characteristics of the two most popular multi-factor strategy construction methods—mixing and integrating—before deciding which is best suited for achieving their desired investment outcome.
. Integrating can be a good candidate for a quant active strategy when high active risk is allowed, capacity is not the primary concern, and sophisticated implementation can mitigate trading cost concerns.
.Investors who value full transparency, diversification, minimal governance oversight, and low fees, should find a mixing multi-factor index strategy a sensible choice.
Regards,
Ted
http://www.etf.com/sections/features-and-news/research-affiliates-food-thought-integrating-vs-mixing?nopaging=1
