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Does 1 and 1 really make 3 in value investing?

6 Minute Read

Value investing is one of the oldest approaches in single stock picking but over the past decade the style has lost some of its appeal.

Numerous researchers and investors have therefore suggested enhanced value strategies that usually combine valuation driven screenings with quality criteria and claim that such strategies result in superior securities selection.

Based on various backtests, our paper challenges these claim and emphasises the important of using appropriate multi-factor benchmarks for multi-factor strategies.