Factor-based Allocation Research Articles

Factor-Based Allocation: Is There a Superior Strategy?

Factor-based allocation embraces the idea of factors, as opposed to asset classes, as the ultimate building blocks of an investment portfolio. Our study contributes to the literature by addressing the question whether there is a superior way of combining factors in a portfolio. We provide a comprehensive comparison of factor-based allocation strategies within a multiple testing framework. Factor-based allocation is profitable, even when applying the necessary multiple testing corrections. Investment portfolios can be efficiently diversified using factor-based allocation since we find robust economic performance over various market states. Ultimately, we provide guidance for investors on the best method to choose when constructing factor-based portfolios. A naive equal-weighted factor portfolio, albeit simple and costless, cannot be outperformed by more sophisticated allocation strategies.

Asset Allocation vs. Factor Allocation—Can We Build a Unified Method?

There is increasing interest in the idea of allocating across factors instead of across traditional asset classes. Allocating across factors has the intuitive appeal of allocating across building blocks that are in theory purer sources of return. In practice, factor-based allocation is not easy: Factors are unobservable and must be specified. However, the authors believe there is merit in integrating insights from factors with traditional asset allocation. Information and views about factors and asset classes can be a powerful combination. In this article, the authors present a framework for combining the two paradigms in an innovative way, resulting in optimal allocations that blend insights from both paradigms. Specifically, their approach derives asset class return prediction from factor-based asset allocation, which allows construction of portfolios for various investment objectives from a unified framework.

Combined Modality Treatment of Hodgkin’s Lymphoma

Substantial clinical progress over the last decades has improved the first-line treatment and prognosis of patients with Hodgkin's lymphoma (HL). This success is mainly based on the introduction of combined modality treatment strategies including chemotherapy in all risk groups and important progress in radiation techniques. The knowledge emerging from numerous clinical trials as well as better staging and imaging techniques helped to develop more effective therapies. According to our current knowledge, a stage and risk factor-based allocation into early favorable, early unfavorable, and advanced stages remains a suitable instrument to tailor risk-adapted therapy. In most of the study groups, patients with early stage HL receive 2 to 4 cycles of chemotherapy followed by radiotherapy to the involved field. The treatment for advanced stages usually consists of 6 to 8 cycles, more intensive regimen, and radiotherapy for residual masses. Here, we review results from current clinical trials and discuss new therapeutic approaches in the combined modality treatment of HL.