Risk Terms
Factor Risk
Definition
What is Factor Risk?
Exposure to a broad return driver such as value, momentumThe tendency of assets with strong recent performance to continue outperforming for a period., size, rates, or credit.
Example in practice
How This Looks in Practice
A portfolioThe complete collection of investments owned by an investor or managed under one mandate. of cheap shares carries value-factor risk.
Keep learning
Related Terms
Risk Terms
Market Risk
The possibility of loss because broad market prices or rates move against an investment.
Risk TermsCredit Risk
The possibility that a borrower or issuer will fail to make promised payments or suffer a downgrade.
Risk TermsInterest-Rate Risk
The possibility that changing market interest rates will reduce an investment's value or income appeal.
MiscellaneousBusiness Day
A day on which relevant financial institutions and markets are open for normal processing.