In a recent white paper co-authored with Christopher Polk, Professor of Finance at the London School of Economics, we argue that understanding the economic drivers of these new systematic risks brings novel insights about how to time factor bets. In particular, market-timing strategies based on more timely forecasts of aggregate fundamentals can be leveraged through a smart beta lens.
In the paper, we demonstrate how dynamic factor strategies that exploit this insight have delivered a significant, long-term performance benefit over static factor approaches and the benchmark. Read the white paper to learn more about how the business cycle impacts factor returns.
Mutual funds and exchange traded funds are subject to market risk and volatility. Shares may gain or lose value. Alternative weighting approaches (i.e., using factor weighting as a measure), while designed to enhance potential returns, may not produce the desired results.
These views represent the opinions of OppenheimerFunds, Inc. and are not intended as investment advice or to predict or depict the performance of any investment. These views are as of the publication date, and are subject to change based on subsequent developments.
For Institutional Use Only. This material has been prepared by OppenheimerFunds Distributor, Inc. for institutional investors only. It has not been filed with FINRA, may not be reproduced and may not be shown to, quoted to or used with retail investors.