He added there’s also an opportunity to start thinking about what are the characteristics of why this might be the case.
“One of the simplest ways is to look at the dividend payout ratio, of all the particular factors,” he said. “We see that they differ significantly. In particular, yield orientated stocks, which may be impacted by rising borrowing costs, when interest rates move up, because they are using their cash flow.”
OppenheimerFunds offers a suite of eight Factor ETFs, in partnership with global index provider FTSE Russell.
- Provide exposure to a portfolio of stocks that score well for exposure to specific factors, including momentum, value, quality, size, and low volatility.
- Seek to maximize exposure to these factors, which have historically provided positive risk-adjusted returns over the market.
- Capitalize on the cyclicality of factor performance by employing a dynamic overlay that looks at leading economic indicators and market sentiment to determine the current market environment and then increases exposure to the factors that tend to fare best in that environment.
- Deliver respective factor exposure to companies in the Russell 1000 Index.
- Provides direct access to a specific factor.
- Can help manage factor exposure and risk within a diversified portfolio.
- Oppenheimer Russell 1000 Value Factor ETF (OVLU)
- Oppenheimer Russell 1000 Size Factor ETF (OSIZ)
- Oppenheimer Russell 1000 Momentum Factor ETF (OMOM)
- Oppenheimer Russell 1000 Quality Factor ETF (OQAL)
- Oppenheimer Russell 1000 Low Volatility Factor ETF (OVOL)
- Oppenheimer Russell 1000 Yield Factor ETF (OYLD)
Financial advisors who are interested in learning more about factor-based investment strategies can watch the webcast on demand by clicking here.