LOW-RISK-BASED INVESTING HAS REWARDED INVESTORS OVER LONGER PORTFOLIO HOLDING PERIODS. THE FACT THAT LOW-RISK STOCKS HAVE HIGHER EXPECTED RETURNS CONTRADICTS ONE OF THE FOUNDATIONS OF FINANCE THEORY: RISK -BEARING ASSETS ARE EXPECTED TO GENERATE A RETURN PREMIUM.

The findings of Haugen and Heins, who in an original analysis dating back to the mid-1970s started to challenge the generally accepted paradigm of the efficient market hypothesis of Fama, have been confirmed in numerous studies across various markets.

Read: Strategy Insight Report