By Jonathan Liss

After Victor Haghani and I did a bit of a take-down on Smart Beta back in early September, I thought it only fair to take a step back and properly articulate the case for utilizing factor investing strategies within well diversified portfolios. And who better to lead this endeavor than the Head of iShares Factor ETF Strategy for BlackRock’s U.S. Wealth Advisory iShares business, Bob Hum. In his role, Bob focuses on supporting iShares clients, generating content on Factors and how clients can implement them within their portfolios.
Bob has a unique way of explaining some of the more complex concepts underlying factor investing in simple, straightforward terms, without dumbing things down at all. The result is a far-reaching conversation that recognizes some of the limits of factor investing without throwing the baby out with the bathwater. Because warts and all, there's certainly a lot of benefits to be conferred by utilizing smart beta strategies within a low cost, tax efficient ETF wrapper. I hope you find this conversation as enlightening as I did.  
Topics covered:
2:30 - Bob's backstory: What drew him to financial markets and ETFs3:40 - Getting basic definitions in place: What is factor investing?6:00 - Smart Beta or Factor Investing?8:00 - What are the main types of factor investing?9:45 - Size10:20 - Style/Value11:35 - Low volatility12:45 - Momentum13:45 - Quality14:30 - What does the persistence of factors say about markets being efficient?16:00 - Why does factor investing work? Structural, behavioral and risk-based explanations18:15 - How should investors think about when different factors flash conflicting signals on the same stock?25:30 - Benchmarking factor performance: Selecting the correct index is crucial28:00 - Why have ETFs been so central to the growth of factor investing31:00 - A brief history of factor investing: Evaluating additional factors for inclusion in broad-based portfolio strategies37:10 - Beyond equity factors: Applying factor investing strategies to other asset classes40:00 - Constructing factor portfolios: Two approaches (LRGF) (USMV)42:30 - New approaches to factor investing in an ETF wrapper: BlackRock U.S. Equity Factor Rotation ETF (DYNF)
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