Smart Beta 2016

A row broke out this year when a pioneer in the sector warned that as smart beta funds grow in size, certain products could go ‘horribly wrong’. Funds Europe looks at what lay behind the controversy – and asks what safeguards there are for investors.

The problem with backing a smart beta factor – such as a low volatility fund, for example – is that the factor could become more expensive as it gains in popularity, eroding any advantages, say experts.

The use of smart beta investing continues to grow. Our panel, made up of both providers and users, discusses what the strategy actually means, how it should be used and the kind of pitfalls that may arise when using this innovative investment technique.

There is no doubt that Smart Beta ETFs are gaining traction in Europe. In June 2016, they reached €19.7 billion in Assets under Management, up 31% versus the end of 20151. In this article we look at what is driving the rise, and how investors could capitalise on it.

Smart beta has its roots in equity investment but is also making headway in fixed income. Some providers suggest it could even be better suited to capturing bond market factors. Funds Europe explains.

Manuela Sperandeo tells Funds Europe why the rationale for smart beta investing is as strong as ever and is here to stay.

Renowned economist Bill Sharpe said the term smart beta ‘makes him sick’. Even some of its practitioners are uncomfortable with it. Kit Klarenberg investigates why people cannot agree on the right way to name the vehicle.

It’s often asserted that multi-factor smart beta strategies can perform in all market conditions, but are such forecasts credible, or pure hot air? Kit Klarenberg investigates.