We’re getting into deeper bearish territory as the Fed is about to raise rates by another 75 basis points. This will dampen demand and make it harder for growth strategies to flourish. Correspondingly, every factor model built by this class has shifted to favour a value-based strategy. We are slowly changing from a course that invests in high dividend and low beta stocks. Now we buy cheap stocks with decent momentum.

One consequence of a shift to value is that the factor models will start to highlight stocks that are unpopular with investors, so the rejection rate this round was much higher. Another anomaly is that, for the first time, the factor models did not flag a single bank or REIT in the final STI portfolio which