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Glossary

Factor Investing

Factor investing targets specific, well-documented drivers of returns - such as value, momentum, quality, or low volatility - rather than picking individual stocks purely on narrative. Screens built around factors (e.g., "high ROIC and positive earnings revisions") are a systematic way to apply this approach across a large universe of stocks.

Related terms
Return on Invested Capital (ROIC)ROIC measures how efficiently a company turns the capital invested in it (debt plus equity) into profit. A consistently high ROIC, especially relative...Universe (Investment Universe)An investment universe is the full set of stocks under consideration for a given strategy - for example, the S&P 500, the NASDAQ 100, a sector index,...EV/EBITDAEnterprise Value to EBITDA is a valuation multiple that compares a company's total value (market cap plus debt, minus cash) to its earnings before...FCF (Free Cash Flow)Free cash flow is the cash a company generates from operations after subtracting capital expenditures - the money actually left over to pay down debt,...
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