Factor investing builds portfolios using characteristics such as value, momentum, quality, volatility, or size that have historically improved returns while reducing risk. Though not new globally, long used by institutional investors, it has recently become more accessible to everyday investors through rule-based mutual funds and ETFs. 

Factor investing is still a prominent strategy, with single-factor and multi-factor strategies designed to balance performance and reduce reliance on any one factor. 

The approach offers transparency and lower costs compared to traditional active management, since decisions follow algorithms rather than human judgment. However, factor strategies carry risks, including the possibility that past patterns may not persist and that widespread adoption can reduce their effectiveness. 

Finsum: Ultimately, factor investing is likely here to stay, and is a time tested investment strategy.’