Mutual Fund Industry Embraces Factor-Based Investing, Blending Active and Passive Approaches
• The domestic mutual fund industry is shifting towards factor-based investing, bridging the gap between active and passive strategies.
• At least three fund houses actively manage funds using factor-based models, while others explore this space through quant and active-momentum funds.
• Factor-based investing employs models based on factors like momentum, company size, value, and market volatility to construct portfolios, offering both active and passive options.