How might factors benefit investors? For additional information, investors should seek the advice of a qualified financial advisor. Every asset class is influenced by underlying factors that help shape returns. Momentum, long maturity bonds, and value and low-volatility stocks can be considered factor-based investments. Investors can use factor-based investments to approach the risk characteristics associated with a range of active investments, including manager- and index-based active strategies. A direct allocation to factors may provide these additional benefits: Joel Dickson Principal in Vanguard Investment Strategy Group “Factors are the DNA of an investment portfolio. They determine how an investment behaves.” Maintaining a clear approach that helps investors understand what’s driving portfolio returns. TRANSPARENCY CONTROL COST Letting investors choose their factor exposure and how it varies over time. Replacing high-cost factor exposures with low-cost factor-based investments.