Smart Factor Blend Helps Smooth Market Bumps

Source: FTSE Russell. All data as of March 31, 2017. Past performance is no guarantee of future results. Returns shown may reflect hypothetical historical performance. See the disclaimers at the end for more information.

A new FTSE Russell and O’Shares study has revealed smart factor blend has helped smooth the market bumps since 2000.

The research from global index provider FTSE Russell and O’Shares ETF Investments, led by ABC, “Shark Tank” panelist member and CNBC contributor Kevin O’Leary, showed that a multi-factor index tilting toward constituents exhibiting higher quality, lower volatility and higher dividend yield characteristics relative to its market cap weighted index has achieved an average annualized index return nearly double that of this index since September 2000 with lower relative index volatility.

The FTSE Developed ex-US Qual/Vol/Yield Factor 5% Capped Index, which selects constituents from the FTSE Developed ex-US Index and weights them based on target factor characteristics of quality, low volatility and yield, has shown an annualized index return of 8.2% from September 30, 2000 through March 31, 2017 with a 14.5% annualized volatility based on hypothetical historical index returns.

This compares to a 4.4% index return and 17.1% volatility for the FTSE Developed ex-US Index for the same period.