How to Use Single- and Multi-Factor Strategies in Every Portfolio | ETF Trends

In an attempt to diversify away from the potential risks of traditional market-capitalization index funds in an extended bull market environment, investors are looking into rules-based index strategies that screen for specific market factors to potentially enhance returns and reduce downside risks.

On the upcoming webcast Thursday, Nov. 8, How to Use Single- and Multi-Factor Strategies in Every Portfolio, Mo Haghbin, Head of Product, Beta Solutions at OppenheimerFunds; Ryan O’Carroll, ETF Specialist at OppenheimerFunds; Joe Smith, Senior Market Strategist for CLS Investments; and Greg Ellston, Director of Asset Allocation at Confluence Investment Management, will go over market factors and the effects of combining various factors into a multi-factor strategy to help financial advisors diversify a traditional equity portfolio.

OppenheimerFunds offers a suite of eight Factor ETFs, in partnership with global index provider FTSE Russell.

The Oppenheimer Russell 1000 Dynamic Multifactor ETF (Cboe: OMFL) and Oppenheimer Russell 2000 Dynamic Multifactor ETF (Cboe: OMFS) are multi-factor ETFs that select companies through exposure to a subset of multiple market factors, including low volatility, momentum, quality, size and value factors. Investors can use these multi-factor strategies to capitalize on the cyclicality of factor performance through a dynamic overlay that screens for leading economic indicators and market sentiment to gauge the current market environment and increase exposure to the areas that tend to fare best in the given conditions.

Additionally, there are specific factor-based, smart beta strategies that come in various flavors. Single factor products offer precise exposure to well-established and time-tested investment styles. The factor focus may help investors manage factor exposure and risk within a diversified portfolio.

Something like the Oppenheimer Russell 1000 Value Factor ETF (OVLU) plays on the theme of stocks that appear cheap tend to perform better than stocks that appear expensive.

The Oppenheimer Russell 1000 Size Factor ETF (OSIZ) focuses on the size factor, which refers to smaller companies outperforming larger company stocks and is screened by full market capitalization.

The Oppenheimer Russell 1000 Momentum Factor ETF (OMOM) follows the idea that stocks which rise or fall in price tend to continue rising or falling in price.