For investors seeking a rules-based, transparent multi-factor strategy, RAFI Dynamic Multi-Factor is designed to offer the following benefits:
- Combines theoretically sound and empirically robust single-factor strategies—value, low volatility, quality, momentum, and size—that allow for straightforward performance measurement and governance.
- Diversifies exposures to factors expected to produce long-term positive excess returns.
- Offers a dynamic allocation process that can potentially improve excess returns.
The RAFI Dynamic Multi-Factor strategy dynamically allocates to value, low volatility, quality, momentum, and size based on long-term reversal and short-term momentum. This strategy is designed for investors who are concerned with the rising valuations of certain factors.
Most of the underlying strategies—RAFI Value Factor Index, RAFI Low Volatility Factor Index, RAFI Quality Factor Index, and RAFI Size Factor Index—are also available on a stand-alone basis to provide investors with a range of choices to meet their unique preferences.
The RA Momentum Factor Index is not available on a stand-alone basis due to its high turnover, high trading costs, and low capacity when implemented outside a multi-factor framework.