THE GERSTEIN FISHER MULTI-FACTOR® APPROACH
Our Multi-Factor® investment approach is designed to offer core asset class representation plus the potential for strong, consistent results for investors with a long-term investment horizon. This approach can leverage market-based information to help identify securities with the potential for higher expected returns. Key investment factors include those that are:
- Firm-level characteristics based on prices or fundamental information from financial statements
- Well-documented in academic research
- Relevant to the explanation of differences in average stock returns within industries and countries, as well as across time periods
- Based on financial market theory and related to a firm’s cost of capital
How it works
It is our opinion that stocks with similar characteristics should have similar expected returns, and these similarities can be measured using readily observable and quantifiable factors.
Diversified portfolios can then be constructed to have strategic tilts toward securities with desirable factor exposures and to minimize unintended firm, industry, and country exposures—an approach that we believe offers the best potential for explainable, sustainable, long-term results.
OUR PROCESS DRIVES CONSISTENCY
MarketStart with all stocks in the relevant benchmark.
MarketUse information in prices and fundamental data to identify securities with high expected returns.
Portfolio ManagementLeverage a flexible trading process that minimizes price impact.
Rebalance periodically to ensure portfolio continues to reflect desired exposures.
ResearchPosition capital to target high-expected-return securities by considering the interactions among premiums, diversification, and costs.