Experts dismiss research showing flaw in value strategies

Academics who argue quant value strategies select companies with inflated accounts miss the point, say industry players

Recent paper says systematic value strategies tilt towards puffed-up numbers

Systematic value investing seems under siege, but factor investors are coming to its defence.

Facts about Formulaic Value Investing, a recent paper co-authored by a Berkeley academic, says systematic value strategies – which often rely on simple accounting ratios – end up tilting blindly towards stocks in companies with puffed-up numbers.

Yet industry players have brushed aside the concerns, saying the point of a factor-based approach is not to select underpriced stocks but to harvest a long

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