The Morningstar Risk Model and Factor-Based Investing Performance

Identify and address risk in your clients’ factor-based investments

The rise of factor-based investment strategies, driven by new factors proposed by experts, underscores the significance of understanding the correlation between market conditions and portfolio performance. Factor investing, a risk-minimizing method, evaluates investments' exposure to diverse market factors, with the Morningstar Risk Model spotlighting returns as a crucial metric for assessing factor performance.

In the evolving market landscape, the recent decline in the volatility factor signals a shift towards less risky assets, rewarding cautious investors and reflecting the prevailing risk-averse sentiment among market participants.

Download the report now Morningstar Risk Model aids in identifying and assessing investment risks by measuring exposure to various factors.