Factor funds (aka smart beta funds) have been proliferating like rabbits in recent years, accompanied by marketing hype that can put political campaigns to shame. In some cases the strategies have merit, but playing fast and loose with the facts isn’t uncommon. In the worst cases, products look like thinly veiled excuses to charge relatively high fees with little or no advantages over a plain-vanilla index fund that targets a similar set of securities. How can you tell the difference? A deep dive with analysis is the only solution.
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