Monday, October 17, 2022
HomeWealth ManagementWhat factors perform better when a recession hits?

What factors perform better when a recession hits?


The paper claims that these two components outperformed because of their defensive nature.

In times of low consumer confidence, some quality and size sub-factors, including return-on-equity, return-on-invested-capital, and sales-to-earnings ratio, have also produced a sizable amount of alpha.

Investing characteristics like value, growth, and quality are examples of broad factors that have more specific assessments.

“Across many different time periods, the quality sub-factors are the ones that persistently outperformed. As for value and growth, it really depends on a lot more different sub-factors,” Lustig said.

Read more: The circle of life in factor investing

He continued by saying that while the value and quality aspects are closely related, their individual components may have distinct objectives.

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