“Single factors have been highly cyclical from year to year, and timing can be a difficult endeavor. Combining multiple factors creates a more diversified solution to potentially enhance returns over time,” Bruno said.
As a way to diversify and potential enhance returns, the Chaikin Analytics approach found under CSML and CLRG combine various proven factors, notably value, growth, technical and sentiment.
The value factor includes screens like LT debt to equity ratio, price to book value, return on equity, price to sales ratio and free cash flow. Technical factors cover price trend, price trend rate of change, relative strength vs. market and volume trend. Growth factors include earnings growth, earnings surprise, earnings trend, projected P/E ratio and earnings consistency. Lastly, the sentiment factor screens for earnings estimate trend, short interest, insider activity, analyst ratings and industry relative strength.
“The IQ Chaikin suite provides exposure to domestic small-cap and large-cap equities through a proven multi-factor model, the Chaikin Power Gauge, making them ideal core portfolio solutions,” Bruno said. “The Chaikin Power Gauge combines four primary factors – value, growth, technical, and sentiment – to select stocks with the potential to provide enhanced returns across market cycles.”
Financial advisors who are interested in learning more about multi-factor investments can watch the webcast here on demand.