Factor Investing in Under the Radar Markets with Chris Covington
Excess ReturnsMarch 30, 202300:52:37

Factor Investing in Under the Radar Markets with Chris Covington

In this episode, we talk factor investing with AJO Vista Head of Investments Chris Covington. We discuss their unique approach to factor investing and how they apply it to less crowded markets. We take a detailed look at their strategy and discuss value, quality, momentum and their approach to measuring stability. We also cover a wide range of other topics including multi-factor investing, the impact of transaction costs, the dangers of overoptimization and a lot more.

03:41 - The history of AJO Vista
10:19 - Finding the right markets to invest in
12:13 - Going beyond the numbers
14:06 - Using non-traditional data
14:51 - Ihe importance of an economic link
16:18 - Customizing factor-based strategies for specific types of companies
18:00 - Defining the value factor
19:15 - How to handle intangible assets
23:43 - Defining quality
25:29 - Using momentum in a factor-based approach
27:31 - Factor-investing in high retail participation markets
29:48 - The stability factor
35:54 - Building multi-factor portfolios
38:00 - Issues with sector concentration
40:15 - What is implementation shortfall?
44:07 - How Chris views tracking error
45:22 - The dangers of overoptimization
48:14 - Evolving an investment strategy over time
50:34 - The one lesson Chris would teach the average investor

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