Factor tilting provides a powerful platform for personalized investment, allowing you to go beyond traditional index investing. By identifying and emphasizing certain factors like value, size, momentum, or quality, you can shape your portfolio to align more closely with your unique investment goals and risk tolerance.
Our approach to factor tilting offers several distinct advantages. Firstly, the control inherent in owning individual securities allows for precision in emphasizing or de-emphasizing specific factors. This can enhance returns by capitalizing on favorable market conditions or reduce risk by mitigating exposure to unfavorable ones.
Moreover, the transparency and customization offered by direct indexing mean you’re not confined to a predefined index or basket of stocks. You can selectively apply factor tilts to particular sectors, industries, or even individual securities, tailoring your exposure to mirror your investment convictions, risk appetite, or even ethical values.
The flexibility offered by direct indexing in SMAs also facilitates continuous monitoring and adaptation. As market conditions evolve, factor tilts can be adjusted in real-time, ensuring that your portfolio remains aligned with your broader financial strategy. This dynamic and responsive approach stands in contrast to traditional mutual funds, where factor tilts might be fixed or slow to adapt.