Mazza argued that these single-factor strategies may be a good way for investors to complement traditional core holdings in either active or passive investment portfolios. Furthermore, more sophisticated investors or financial advisors may also look at these single factors as a way to create their own targeted strategies that focus on specific factors to capitalize on market moves.
On the other hand, investors may also combine the various factors to gain an easy-to-use and quick way to access a diversified market position. This combined factor or multi-factor, smart beta approach may be a good core position for any equity portfolio. For example, the Oppenheimer Russell 1000 Dynamic Multifactor ETF (Cboe: OMFL) and Oppenheimer Russell 2000 Dynamic Multifactor ETF (Cboe: OMFS) select companies through exposure to a subset of the low volatility, momentum, quality, size and value factors. Multi-factor is a “great way to be a core holding for advisors,” Mazza added.
Investors who believe in a return to fundamentals can look to the revenue-weighted methodology, including other options like the Oppenheimer Large Cap Revenue ETF (NYSEArca: RWL), Oppenheimer Mid Cap Revenue ETF (NYSEArca: RWK) and Oppenheimer Small Cap Revenue ETF (NYSEArca: RWJ).
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