In this episode of Excess Returns, we sit down with Matt Zenz of Longview Research Partners to explore factor investing, evidence-based strategies, and the challenges and opportunities in today’s markets. Matt shares insights from his engineering background, his time at DFA, and his current work running the Longview Advantage ETF (EBI). We cover the nuances of value, momentum, size, implementation, and how investors can think more effectively about long-term returns. Topics covered: Matt’s journey from engineering to investing Lessons learned at DFA and the foundation of evidence-based investing Defining factors and what makes them credible The role of value, momentum, quality, and size in portfolios The challenges of intangibles and redefining value Large cap tech dominance, mean reversion, and whether the world has changed Factor timing, valuation spreads, and Cliff Asness’ “sin” framework How momentum can be integrated with value tilts Portfolio construction: combining factors vs sleeve approaches Implementation challenges for large vs small managers How Longview manages liquidity, turnover, and trading costs The potential impact of AI on factor investing Future opportunities in implementation alpha and ETF design Matt’s biggest investing belief most peers disagree with The key lesson he would teach the average investor Timestamps: 00:00 Value vs returns and factor investing basics 03:00 From engineering and Boeing to investing 06:15 Time at DFA and lessons in evidence-based investing 07:30 What evidence-based investing really means 09:25 Defining factors and what makes them valid 12:00 Using value, profitability, size, and momentum 16:00 Large cap tech dominance and future returns 18:00 Mean reversion and whether the world has changed 20:00 How long does value need to struggle before it’s “dead”? 22:30 Should value be redefined for intangibles? 25:30 Intangibles, R&D, and why adjustments add noise 27:00 Value’s performance across economic cycles and migration 30:00 Interest rates, growth, and value performance 32:00 Factor timing and valuation spreads 34:15 The role of momentum in timing and implementation 35:00 How Longview applies passive-aggressive tilts 36:30 Combining factors vs sleeve approaches 39:00 How momentum is used in practice 41:30 Factor migration and average holding periods 43:00 The size premium and whether it still exists 44:30 The benefits of being nimble vs large fund families 47:30 Liquidity challenges in small cap value 52:00 The role of AI in investing 54:00 Where implementation adds the most alpha 55:30 One belief Matt holds that peers may disagree with 57:20 The one lesson for the average investor
