The Profitability Factor

Phil DeMuth discusses a possible breakthrough for factor-based investors known as “Profitability”. “Over time, tilts towards value, momentum and profitability have outperformed the market, and due to the diversification benefits, a combined portfolio of these three has provided much higher reward per unit of risk and a significant reduction in extreme risk or losses. Thus, an approach that combines these three themes using an integrated, straightforward methodology that is designed to endogenously and efficiently capture these themes and take advantage of their natural synergies is ideal.” Read the full article >>