Regardless of intention, I think a lot of the commentary on active management performance is misleading. High or low success rates for active managers are far too often explained in nonsensical ways. In fact, there are just four main options in my view and three of these likely explain the anomaly in small-cap equities.
Factor-based investing has seen rapid growth since the financial crisis, as investors look beyond traditional asset class labels to understand what really drives the performance of their portfolios. Bombarded with new products and an ever-growing body of research, what should investors focus on before jumping on the factor bandwagon?