Level 0 ETF basics · Part 12/14

Factor ETFs: Value, Quality, Growth & Small Cap

Factor ETFs reweight a broad index toward a specific style. The funds in the catalog with their current holdings:

Schematic line of a factor's relative performance against the overall market with multi-year phases above and below zero
Schematic, not measured data: this is how factor premiums typically behave. (1) Multi-year phases in which a factor leads the market alternate with (2) long dry spells. Looking only at short periods, the picture can be the opposite depending on the starting point.

The fund pages show top holdings, sectors and countries, and how differently the same “world” is composed depending on the factor. Any two can be set side by side in the ETF comparison .

In context

Factors change diversification and risk profile relative to the market index. Their out- or underperformance runs in cycles that can last many years; in portfolios they are therefore usually used as an addition to a broad core.

Information only, not investment advice.