Talk Your Book: The Case for Value and Momentum

Victory Capital argues blending value and momentum factors (50/50, sector-neutral, risk-weighted) reduces each factor's standalone drawdowns and traps.

• Combining factors smooths drawbacks: Lance Humphrey says pairing value and momentum avoids value traps (cheap stocks going nowhere) and momentum blowups (expensive stocks with no fundamentals) by requiring both an attractive valuation and a positive price signal.
• Simple, broad construction: Victory's indexes use three valuation metrics (price-to-cash-flow, price-to-book, price-to-earnings) and 6- and 12-month momentum, averaged 50/50, selecting the top 25% of a universe (e.g., 125 of the largest 500 names).

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