I currently invest in a global market-cap-weighted ETF (VT) and follow a very simple, passive, buy-and-hold strategy. I'm wondering whether introducing factor ETFs (quality, value, momentum, multifactor, etc.) can meaningfully improve long-term returns without introducing excessive risk, tracking error or unnecessary complexity and rebalancing headaches. A few questions: - Do people actually replace their entire broad-market ETF allocation with factor ETFs, or do they generally use them as smaller tilts? - Does introducing a 10–15–20% factor allocation meaningfully improve long-term returns? - Is there solid historical evidence that factor investing consistently improves risk-adjusted returns over a broad global market ETF? - Are the potential benefits worth the additional complexity, fees and possibility of underperforming the market for years? - Which factors would you even consider? I'm a passive, long-term investor. I don't trade and prefer to keep things simple. I'm currently in the accumulation phase, so my priority is maximising long-term total returns. I'm not necessarily looking to chase recent performance. I just want to understand whether adding a factor component to an otherwise simple, one-ETF global portfolio is genuinely worthwhile. Would appreciate feedback, especially from people who have actually implemented factor investing in their portfolios. Thanks! -Staff9562
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