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4 years ago

Factor portfolios outperform sector portfolios for long-term investments, study finds.

SSRN Electronic Journal
Factor-Investing and Asset Allocation Strategies: A Comparison of Factor Versus Sector Optimization
Wolfgang Bessler, Georgi Taushanov, Dominik Wolff

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The article compares factor and sector investment strategies to see which one performs better over time. Factor portfolios tend to do better in the long run, while sector portfolios can be more beneficial during economic crises. Different portfolio optimization methods were used, and the results show that factor portfolios generally outperform sector portfolios during normal times.