Factors, also referred to as risk-premia, have historically explained a significant part of companies' risk and return. Key factors include quality, value, size, momentum, and volatility. Broad factor strategies may yield superior risk-adjusted returns versus a standard market cap benchmark2, while targeted factor exposures can be used tactically to manage risk.
iShares Market Perspectives (October 2012) - A Smoother Ride? The Case for Minimum Volatility in the Near -- and Long -- Term, Market Perspectives, Russ Koesterich, Dan Morillo, outlook