Factor funds lie somewhere between discretionary active and rule-based passive funds. These are also called ‘smart beta’ funds. We like to think of them as “Active Beta” or Rules-Based Active Funds.

A stock’s beta is one easily available parameter which can be helpful as a gauge of a stock’s volatility relative to the broader market or a particular portfolio.

Recently we have seen a lot of index funds/ETFs getting launched and it does include smart-beta funds as well. Read on to understand whether it is worth your attention.