Poll: Is Smart Beta a Passing Fad?

At the recent CFA Institute Annual Conference, a session was devoted to “smart beta.” Some argue that smart beta products provide investors with an active approach to passive investing, whereas others believe that it is simply a catchall marketing term that describes any quantitative, rules-based investment strategy that can be formed into an index and sold through mutual funds or exchange-traded funds.

Because of the disagreement about the true nature of smart beta, we asked Financial NewsBrief readers.

With respect to smart beta, which of the following statements best reflects your views?

Given the polarity of views about smart beta in the financial press, one may have expected a similar result in our poll. In fact, only around 17% find smart beta to be a worthwhile innovation that enhances return and reduces risk, whereas 27% believe that it is a passing fad. What is most interesting is that more than half of respondents have neither a positive or negative view, with more than 38% stating that they need additional information to form a view, and just more than 14% believing that smart beta is too new to judge decisively; the balance (4%) did not choose any of the options offered.

For more information on the issues surrounding smart beta, read our recent blog post, “Which Beta Is Smart?”

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.