The case for quality, stability, and income

March 4, 2020

Factor-based investing involves targeting securities based on specific attributes, or “factors.” While factor investing is certainly not a new concept, it is far more widely used today as a means to achieve superior returns and portfolio diversification through specific, identifiable factors.

Most institutional investors have an investment return target that is well above the returns available from the safest investment-grade bonds. As a result, sizable strategic investments in higher-returning equities are necessary to meet investment goals. Based on the research presented below, Meketa Investment Group believes that a US equity portfolio tilted towards three factors – higher quality, higher stability, and higher income stocks – can increase risk-adjusted returns for equity-oriented investors.