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The ‘factors’ investors should be wary of

Investing in funds that focus on a particular stock characteristic such as growth or value have very mixed record

Experience tells me that if you like having arguments with fund managers, or just generally annoying people, one really good way to do that is to initiate a conversation about passive investing.

Asset managers tend to either love it, and bristle in irritation if you fail to love it as much as they do, or hate it because they pick stocks for a living and index tracking funds are eating their lunch, degrading their expertise and even, some reckon, sedating markets.

But there is, of course, a third way in between bunging your money in a stocks index for a tiny fee on the one hand and paying an active manager quite handsomely in the hope it will pick all the right stocks on the other, and that is factor investing. Happily for those of an argumentative persuasion, this is studded with disagreement too.

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