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A flight to quality in uncertain times

BlackRock |Dec 4, 2018

Introducing the Quality Factor

When volatility rears its ugly head, investors often look for companies with solid balance sheets and stable earnings to provide ballast within their portfolio. In its simplest form, Quality investing is about finding companies which possess pricing power, exhibit strong profitability and have additional sustainable competitive advantages which allow the business to remain viable over time.

In this paper we will be exploring the Quality Factor, highlighting why it has historically outperformed, and discussing 3 things you should know about the factor:

1) Quality has historically performed well during economic slowdowns and contractions
2) Quality can potentially provide ballast during market turmoil
3) Implementation and portfolio construction is critical when employing Quality within a portfolio.

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