The Kavout Factor Difference – Quality

Oct 8, 2019 | Factor Investment

Factor investing is more relevant today than ever before. At Kavout, we approach using Factors differently:

  • We do the leg work. We are able to intake, calculate and process more data than humanly possible. This means you have more time and resources to manage wealth effectively and ultimately do more with less.
  • More data, more insights. Human analysts are forced to focus on a limited number of factors. At Kavout, we are able to manage all factors. By having access to more, you can discover previously hidden insights.
  • A 360-degree view. Are you looking at a particular time period? A particular sector? A particular sector in a particular time period? Our data is as wide as it is deep. We are able to provide a 360-degree view of the factors and can slide-and-dice the data according to your needs.

A Quick Look

We constructed a portfolio based on three key sub-factors: profit, growth and safety. To test the performance of our quality portfolio, we back tested the ten portfolios over the period January 1, 2004 to August 31, 2019. The portfolio was rebalanced quarterly using a market-cap weighted method, with 20 basis points deducted as costs per transaction.

Cumulative returns of the sub-factor portfolios versus the S&P 500

Analysis of the sub-factor portfolios versus the S&P 500

Kavout has the unique ability to provide comprehensive information on individual (Quality_Profit, Quality_Growth, and Quality_Safety) and composite Quality Factors (Quality_Composite). Even though the information is for a limited time range, you are able to see the performance of each Quality Factor.

In the next blogs we break down the Quality factor by sector and by time horizon.

Quality Factor Breakdown by sector

Quality Factor Breakdown by time horizon

Are you interested in seeing the latest performance of the quality factor for the US stock market? Click below to learn more and download sample data for the quality factor.

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