Stock Expert AI
Equity research screen

Factor Investing Strategy Guide

Factor investing targets specific stock characteristics to enhance portfolio returns or manage risk. This guide covers the basics of factor investing, focusing on value, momentum, quality, and size factors. The featured stock screen highlights ETFs that capture these factors, offering exposure to potentially market-beating strategies. With ongoing market volatility and the search for consistent alpha, factor-based approaches offer a structured, data-driven method for portfolio construction.

Quick Answer This page provides a guide to factor investing, an investment strategy focused on selecting securities based on specific attributes that have historically driven higher returns. The screen highlights ETFs that capture value (VLUE), momentum (MTUM), and quality (QUAL) factors. These ETFs offer exposure to strategies that could potentially outperform the market.
Examples3Screens60Updated2026-09-03
Data sources: Financial Modeling Prep | Yahoo Finance | SEC Filings 21,000+ US companies analyzed

Understanding Factor Investing

Factor investing is an investment approach that selects securities based on specific attributes, or factors, that have historically demonstrated higher returns. These factors reflect underlying drivers of stock performance. The goal is to build a portfolio with exposure to factors that are expected to outperform the broader market.

Worked Example: These Figures Today

The companies used as examples above, with the live figures behind them. Illustrations of the metric — not a ranking, not a shortlist, and not a recommendation.

Example companies for this topic, listed in the order the guide introduces them — figures as of 2026-09-11; prices refresh on page view. Source: Financial Modeling Prep, Yahoo Finance.
Ticker Company Price Change Market Cap MoonshotScore
VLUE iShares MSCI USA Value Factor ETF $200.89 -1.19% $11.0B —
MTUM iShares MSCI USA Momentum Factor ETF $303.15 -1.99% $29.2B —
QUAL iShares MSCI USA Quality Factor ETF $218.42 -0.52% $46.4B —

Factor ETF Shortlist

The shortlist includes: * **VLUE:** Aims for value stocks. * **MTUM:** Focuses on stocks with strong price momentum. * **QUAL:** Targets high-quality companies.
“MoonshotScore rates a US-listed stock 0 to 100 — higher means stronger numbers. Most carry an older nine-factor score; the rest use five sector-relative pillars, re-ranked daily — common stocks and ADRs only. Funds, ETFs, warrants, units, SPACs, preferreds, and notes carry none. It is built for education and deeper due diligence, not financial advice.”
— Stock Expert AI published methodology (how MoonshotScore works)

Questions worth resolving before acting on the screen

What are the main factors in factor investing?

The primary factors include value, momentum, quality, size, and volatility. Value focuses on undervalued stocks; momentum on price trends; quality on financial health; size on market capitalization; and volatility on price stability.

How can factor investing improve portfolio returns?

Factor investing can potentially enhance returns by targeting specific characteristics that have historically outperformed the market. By diversifying across multiple factors, investors can also manage risk.

What are the risks of factor investing?

Factor performance can be cyclical, with periods of outperformance and underperformance. It's important to diversify across factors and maintain a long-term perspective. Additionally, factor definitions and implementations can vary, impacting performance.

Explore More Research

Stock Expert AI provides data and analysis tools for educational purposes. This is not financial advice. Past performance does not guarantee future results. Always consult a qualified financial advisor before making investment decisions. Data sources: Financial Modeling Prep, Yahoo Finance.