Explosive growth for smart beta in Europe

graph upInvestments in smart beta have increased from less than €2 billion in 2004 to nearly €73 billion at end December 2014. The number of funds in this category has almost tripled in the last five years, from 123 funds in 2009 to 345 funds in 2014. The report from Morningstar, sponsored by State Street Global Advisors and entitled “The State of Advanced Beta in Europe”, also showed that over 85% of total assets invested in smart beta are invested in equity products. The second most popular asset class is fixed income, with 9.9% of total assets. Under Morningstar classification, the most popular strategies in Europe are low volatility/equal weight. There was more than €26 billion invested in 106 funds in this joint category, as at the end of 2014. Dividend and fundamental weight strategies followed, with over €22 billion and €18 billion, respectively. “Demand for [smart beta] funds has increased over the last couple of years and looks likely to continue to increase,” says the report. Morningstar suggests equity funds will continue to dominate in smart beta, but fixed income products will grow their presence in the coming year. New hybrids, for example multifactor funds that combine factors such as low volatility, quality and value, are expected to become more prevalent. ©2015 funds europe

Executive Interviews

INTERVIEW: Put your money where your mouth is

Jun 10, 2016

At Kempen Capital Management, they believe portfolio managers should invest in their own funds. David Stevenson talks to Lars Dijkstra, CIO of the €42 billion manager.

EXECUTIVE INTERVIEW: ‘Volatility is the name of the game’

May 13, 2016

Axa Investment Managers chief executive officer, Andrea Rossi, talks to David Stevenson about bringing all his firm’s subsidiaries under one name and the opportunities that a difficult market...


ROUNDTABLE: Beyond the hype

Oct 13, 2016

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.

MIFID II ROUNDTABLE: Following the direction of travel

Sep 07, 2016

Fund management firms Aberdeen and HSBC Global meet with specialist providers to speak about how the industry is evolving towards MiFID II.