Blog - Factor Investor


 

So far in this series, we’ve covered faulty benchmark construction, the wide array of fundamental drivers, and the critical importance of quality in cutting through the noise among micro cap stocks.

Thus far, we touched on quality themes like financial strength, earnings quality, and earnings growth to screen stocks out.

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In each case, a simple average of characteristics for Micro cap stocks betrays the universe’s lower quality nature relative to Large Stocks.

By adjusting the micro cap universe, the overall metrics dramatically improve, and in some cases, are actually better than Large Stocks.

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For the first installment of this series, I dove into the Russell Microcap® Index to understand it's construction and behavior.

For the remainder of this series, I diverge from the Russell index definitions to get a better sense of the composition of micro cap and the alpha opportunity available.

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The curious world of micro cap investing [0.02]

Posted on July 9, 2017, 12:53 p.m. by Blog - Factor Investor @ [source]

I've recently been exploring the world of micro cap stock investing. The final installment is a discussion of the real world application of the theory discussed in the first three installments, and an argument for the persistence of alpha in the space.

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I've recently been exploring the world of micro cap stock investing. The final installment is a discussion of the real world application of the theory discussed in the first three installments, and an argument for the persistence of alpha in the space.

benchmark cap etf hear installment market micro cap providers small stock

 

The True Cost of Indexing [0.13]

Posted on Feb. 16, 2017, 2:01 p.m. by Blog - Factor Investor @ [source]

Anyone in the investment industry not living under a rock has read about, investigated, or had an intense conversation with a client about the merits of passive exposures in investment portfolios. The popular pitch is that widely-owned portions of the market, most notably U.S. large cap equity, are efficient.

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