Our unique approach to factor investing
12 November 2018 | Investing
While factor investing continues to rise in popularity as a clearer lens through which to view risk and return, the key to potentially boosting excess returns and lessening risk lies in how the portfolio is constructed and managed. Vanguard's differentiated approach to factor investing is designed to deliver strong and consistent exposure to target factors in a flexible manner.
Here's what makes our approach unique and the benefits it can bring to investors.
Funds that concentrate on a relatively narrow market sector face the risk of higher share-price volatility.
Diversification does not ensure a profit or protect against a loss.
All investing is subject to risk, including possible loss of principal.
Factor funds are subject to investment style risk, which is the chance that returns from the types of stocks in which the fund invests will trail returns from broader stock markets. Factor funds are subject to manager risk, which is the chance that poor security selection will cause the fund to underperform relevant benchmarks or other funds with a similar investment objective.
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