Wealthface Trade

Factor Investing
your road to beat the market

How it works

3 simple steps to build Your customized portfolio

  • Customize an investment strategy
  • Analyse the performance of this strategy
  • Replicate and rebalance this strategy in your portfolio with one click

Our Platform Features And Benefits

  • Inspired by academic research
  • Screen thousands of stocks by factors
  • Build a robust portfolio like professional portfolio managers
  • Save time
  • Remove emotional bias

Trading and Security

  • Trade thousands of stocks worldwide through our platform for free
  • Our broker is a member of SIPC, which cover accounts up to 500,000$ against bankruptcy
  • Everything is encrypted

Plans

Basic

Free

Try our free limited plan for free

  • Search Tickers
  • Watchlist Monitor (Limited to 1)
  • Strategy builder
  • Strategy monitor
  • Connect to brokers
  • Fractional Shares (with our main Partner)

Pro

$20 /month

Or prepay annually and save ($48)

  • Search Tickers
  • Watchlist Monitor (Limited to 3)
  • Strategy builder (Limited to 3)
  • Strategy monitor
  • Connect to brokers
  • Fractional Shares (with our main Partner)

Premium

$30 /month

Or prepay annually and save ($72)

  • Search Tickers
  • Watchlist Monitor (Limited to 10)
  • Strategy builder (Limited to 10)
  • Strategy monitor
  • Connect to brokers
  • Fractional Shares (with our main Partner)

Plans

Basic

Free

Try our free limited plan for free

  • Search Tickers
  • Watchlist Monitor (Limited to 1)
  • Strategy builder
  • Strategy monitor
  • Connect to brokers
  • Fractional Shares (with our main Partner)

Pro

$20 /month

Or prepay annually and save ($48)

  • Search Tickers
  • Watchlist Monitor (Limited to 3)
  • Strategy builder (Limited to 3)
  • Strategy monitor
  • Connect to brokers
  • Fractional Shares (with our main Partner)

Premium

$30 /month

Or prepay annually and save ($72)

  • Search Tickers
  • Watchlist Monitor (Limited to 10)
  • Strategy builder (Limited to 10)
  • Strategy monitor
  • Connect to brokers
  • Fractional Shares (with our main Partner)

FAQs

quantitative investing is a computer-based investment approach that uses mathematical models to screen and evaluate thousands of company stocks at the same time.

The model look at multiple financial or technical ratios, including risk levels, past performance, sectors or even countries to find the best companies.

Factor investing is a quantitative investment approach that involves targeting quantifiable firm characteristics or “factors” that can explain stock performance.

Academics have identified many different factors, but there are six equity factors that outstands in terms of academic robustness:
i. Volatility
ii. Value
iii. Size
iv. Momentum
v. Investment
vi. Profitability
The volatility factor represents the relationship between the stock’s volatility and it’s future performance. Through their academic research, Haugen & Heins (1972) found that in the long term, a portfolio of low volatility stocks is better in term of risk adjusted-return than a portfolio of high volatility ones. We can identify low volatile stocks by their 1-year volatility.
The value factor represents the relationship between the company’s relative valuation and it’s future performance. Through their academic research, Fama & French (1992) found that in the long term, a portfolio of relatively cheap companies is consistently outperforming a portfolio of relatively expensive ones. We can identify the cheapness of a company by a lower price to book ratio.
The size factor represents the relationship between the size of a company and its future performance. Through their academic research, Fama & French (1992) found that in the long term, a portfolio of smaller size companies is consistently outperforming a portfolio of larger size ones. We can identify small size stocks by their market capitalization.
The momentum factor represents the relationship between the stocks past performance and it’s future performance. Through their academic research, Jagadeesh & Titman (1993) found that in the long term, a portfolio of past winners is consistently outperforming a portfolio of past losers. We can identify winners by calculating their past 12 months performance and omitting the last month.

The investment factor represents the relationship between the company’s assets growth and it’s future performance. Through their academic research, Sheridan & Wei (2004) found that in the long term, a portfolio of companies with lower assets growth is consistently outperforming a portfolio of companies with higher assets growth. We can identify lower investment companies by their 1-year asset growth.

The profitability factor represents the relationship between the company’s profitability and it’s future performance. Through his academic research, Robert Novy-Marx (2013) found that in the long term, a portfolio of companies with higher profitability is consistently outperforming a portfolio of companies with lower profitability. We can identify highly profitable companies by their gross profit to assets ratio.
Academic research has shown that the six equity factors above all have the potential to outperform the broad market over the long term, but they may all have periods of short-term underperformance as well.That’s why diversifying factor exposures is the best solution for the long term investors.

Factor exists due three common reasons:

      1. Risk premium: Compensation for additional risks versus the broad market that is, for an undesirable return pattern.
      2. Behavioral psychology: Markets are inefficient due to behavioral characteristics of investors for example:
        1. Anchoring
        2. Action bias
        3. Loss Aversion
      3. Market structure: Markets can be inefficient due to restrictions and limitations for example short selling or the use of leverage.
As an investor you can use factor investing in your portfolio either to generate returns above the market, reduce your portfolio risk or improve your portfolio diversification.
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