Fund ExplorerIndicesInsightsVideosPricing

Building a Long-Term Equity Portfolio

Market timing via factor investing

Nicolas Rabener
10 min read
29 Nov 2021

SUMMARY

  • With a long-term time horizon, investors should consider alternatives to the market-cap weighted equity indices
  • A valuation-based approach for creating an equities portfolio may seem more sensible
  • Using EBITDA / EV yield seems to avoid some of the quality issues of other value metrics

INTRODUCTION

All the evidence points to active management providing negative alpha and most investors being best off by simply holding an ETF for their equity allocation. The cost for a market cap-weighted global equities index has become negligible and the position would only require occasional rebalancing within a diversified portfolio. Sweet and simple.

Keep reading with Institutional

Includes the full research library of 400+ articles, plus Returns Analyzer and Risk Analytics for return and risk contribution analysis.