[This ETF Industry Perspective is sponsored by Fidelity.]
Research and historical performance have illustrated that exposure to certain factors may improve returns, reduce risk and/or help investors achieve specific investment outcomes. As a result, investors may want to consider employing factors to build or enhance their portfolios. But implementing factor-based (or “smart” or “strategic” beta) investment strategies may be perceived as challenging, and some investors may be unsure how best to do so.
In this white paper, Fidelity offers three potential approaches to using factor-based strategies: 1) for strategic exposure to factors, 2) for cyclical exposures that vary through time and 3) as portfolio construction and risk management tools.
Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money. Fidelity Investments Institutional Company, Inc.