Factors are the building blocks of investment returns. In this episode, our hosts explain what they are, how they work, and how you can use them in your portfolio. They enlist some of their colleagues to explain how investors like AQR use factors such as value, momentum, carry, and defensive to try to generate excess returns across asset classes. Ronen Israel is a Principal at AQR and the head of its Global Alternative Premia group, and he walks through what exactly a factor is. Sarah Jiang, a Managing Director and senior researcher at AQR, gets into the details of how investors can use factors in building a portfolio. And Jacques Friedman, Principal and head of AQR’s Global Stock Selection team, walks listeners through the way AQR refines an investment process in order to build diversified portfolios.