Practical analysis for investment professionals
30 May 2014

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?
Poll: Is Smart Beta a Passing Fad?

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.

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About the Author(s)
Robert Stammers, CFA

Robert Stammers, CFA, is director of Investor Engagement for CFA Institute and is responsible for increasing the use and distribution of Future of Finance and CFA Institute content by various audiences. Prior to joining CFA Institute, Stammers was the principal for his founded company where he consulted for real estate owners, lenders, and syndicators to develop and analyze structured real estate investments. There he devised strategy for obtaining debt and preferred equity capital and created finance-related marketing materials and research papers for various clients. Stammers has authored over 100 articles on various financial and investment topics for such investment periodicals as Forbes and Investopedia. He served as a senior equity analyst, where he was responsible for the creation of new investment tools and instructional products to provide the revenues for two new investment education companies. As a senior executive for several institutional fund managers, Stammers was the portfolio manager for a $1 billion enhanced real estate fund, a $1.2 billion private timber fund, and several pension fund separate accounts.

1 thought on “Poll: Is Smart Beta a Passing Fad?”

  1. Ngoc Anh says:

    Low volatility is a fad, especially the low volatility beta as the low risk anomaly has decreased, if any, when one deals with an absolutely no survivorship dataset.

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