Related: Big Dividends, Small Volatility in This ETF
Valuing high quality value is particularly important as bull markets enter their waning stages, as some market observers believe the current bull market is doing. In the early stages of bull markets, lower quality companies see their shares soar. However, as the bull market ages, investors often exhibit a preference for higher quality fare with more compelling valuations.
“It’s no surprise that the quality and low volatility factors have performed well in 2018 as the more defensive nature of the underlying securities they represent have historically done well in volatile markets,” said Mo Haghbin, senior vice president & head of beta solutions product, OppenheimerFunds. “The shift infactor exposure in recent months to emphasize these factors over others as reflected in the FTSE Russell indexes has benefited overall index performance over the last year.”
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