How KvantraRank works

The three factors

• Value

  40%

  How cheaply a company is priced relative to its fundamentals. Cheaper companies have historically earned higher returns over time.

• Quality

  35%

  How solid and well-run a company is: profitability, cash generation and balance-sheet strength.

• Momentum

  25%

  Whether the company has outperformed its peers over the past year, including the trend in analyst expectations.

These three factors are chosen because they are the best documented in academic research across markets, time periods and sectors, which is why the Norwegian sovereign wealth fund uses the same framework.

The weighting

KvantraRank starts from a base weighting of Value 40%, Quality 35% and Momentum 25%. Combined, these identify attractively priced quality companies with positive price trends.

These weights adapt slowly to the market. When valuations within a region and sector are unusually stretched (a wide gap between the cheapest and most expensive companies) the Value weight is nudged up (and Quality and Momentum down) because cheapness tends to matter more in those conditions. The opposite happens when the spread is narrow. The adjustment is capped at ±10 percentage points and is measured against years of history, so the weights drift gradually rather than jumping around.

Fair comparison

A stock is only ranked against other companies in the same region and sector, never against the entire market. A Norwegian industrial company is compared with other European industrials, not with US technology companies. We also separate large caps from small- and mid-caps, so companies compete against real peers.

Where you'll see it

You'll find KvantraRank everywhere on the platform. The KvantraRank table lets you rank every stock in a country. Each stock profile shows its score. Your portfolio shows the combined score of your holdings.

When data is missing

Some companies don't have enough data for a reliable score. A sub-score (Quality, Value or Momentum) is only approved when enough of its underlying metrics are available. The combined KvantraRank is only shown when all three sub-scores are approved, so a KvantraRank always means the same thing: a complete Quality, Value and Momentum assessment. If one sub-score is missing, we show the two sub-scores we have and leave the KvantraRank as N/A. If too many metrics are unavailable, no scores are shown at all. We never re-weight a score on partial data.

Academic grounding

The approach builds on decades of factor research, including Novy-Marx (2012) on gross profitability, Sloan (1996) on accruals, and Cooper, Gulen & Schill (2008) on asset growth, among others.