For investors seeking a rules-based, transparent multi-factor strategy, RAFI 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.
The RAFI Multi-Factor strategy uses an equally weighted blend of five factors: value, low volatility, quality, momentum, and size.
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.