Factor investing – or smart beta – is on the rise. And with good reason. Factors are long-term drivers of investment returns. This means that investors can potentially enhance returns or reduce risk by exposing their portfolios to meaningful factors. Last week, we hosted a webinar with Alvin Chow, CEO of Dr Wealth, to get his take on factor investing. Alvin is a firm believer in factor investing and has been using this strategy in his portfolio for the past seven years. Here are the highlights of our conversation.

What are factors?

Very simply, factors are drivers of investment returns – they provide investors with a higher probability of returns. Factors are grounded in decades of academic research. In fact, factors are becoming so numerous that some have referred to the universe as a factor zoo. Alvin noted that although there are thousands of factors, not all factors are significant....