A shift towards factor-based investing or “Smart Beta” investing is gaining momentum. But the vast majority of individual investors and advisors are missing the boat.
Factor investing isn’t a new idea. Academics have been talking about it for over 40 years. Investable and cost-effective strategies have been around for about 20 years in the US. Canada lags the US market, so factor-based strategies are less common here. Unfortunately, many investors either don’t understand or haven’t even heard of factor-based investing. It’s time for Canadian investors to play catch up.