Factor investing is popular. As frequently happens when the consensus advocates a particular approach to investing and it becomes part of mainstream thinking, some pundits express the view that it’s being overdone and will inevitably be spoiled by its success.

Other investment fads have suffered when the bandwagon became overcrowded, so such concerns cannot be dismissed out of hand. Factor investing however is much more than a fad. Some declinations of the strategy may not fulfil everyone’s expectations but in our view the overall approach is very much here to stay.

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BNPP IP: Overcrowding and other fallacious concerns about factor investing