Smart Beta & Enhanced Indices
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October 1, 2012 12:21 AM
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What Does the Investment Term`Smart Beta' Mean?: Video

What Does the Investment Term`Smart Beta' Mean?: Video | Smart Beta & Enhanced Indices | Scoop.it
Bob Rice, general managing partner with Tangent Capital Partners LLC, explains the "Smart Beta." (Source: Bloomberg)...
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October 1, 2012 12:19 AM
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Investors Increasingly Drawn To Smart Beta

Exchange-traded funds based on alternative indices have been growing in popularity in recent years, and issuers have launched a range of so-called “smart beta” products to meet the increasing investor demand. But there’s still plenty of room for growth, according to the Edhec-Risk Institute. In its 2011 European ETF survey, released earlier this week, it reported that 39 per cent of survey respondents said that they would like to see more ETFs based on alternative indices, up from 29 per cent in last year’s survey.

 

Alternative indices have appeared in many guises, from accessing new asset classes through to factor or risk premia-based indices. However it is smart beta, a reassessment of how to weight existing assets to produce more efficient investments, that is capturing the attention of investors in Europe and worldwide.

 

To understand the rationale behind the various new approaches devised by ETF and index providers to respond to the growing demand from investors, it is useful to first consider the criticisms of traditional market capitalisation-based benchmarks. Market-weighted indices are an attempt to index a market portfolio and therefore, according to the Capital Asset Pricing Model (CAPM), should approximate to the “beta” of the market.

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October 1, 2012 12:16 AM
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Is Smart Beta a smart choice for investors?

Seeking Smart Beta can lead to stupid alpha

 

Investment continually searches for the holy grail of sky high returns with zero risk - or, when that idea is sold to the more intelligent, an above average return with no more than middle of the road risk. But just as the grail itself has proved difficult to pin down - most doubt or deny its existence - it may well be that the investment version is just as elusive.

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October 1, 2012 12:14 AM
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Harnessing the rise of 'alpha' ETFs - Citywire

Harnessing the rise of 'alpha' ETFs - Citywire | Smart Beta & Enhanced Indices | Scoop.it
The number of 'alpha ETFs' rose from just a handful in 2006 to around 65 last year, indicating actively managed ETFs are becoming a more popular 'modern alternative' for investors.
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October 1, 2012 12:11 AM
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How to get smart about ‘smart beta’

How to get smart about ‘smart beta’ | Smart Beta & Enhanced Indices | Scoop.it
It seems as if everyone is talking about smart beta, but what is it really? Is it like a “smart phone” – a revolutionary breakthrough destined to transform an entire industry and lifestyle? Perhaps not.
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October 1, 2012 12:20 AM
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Nutmeg’s Hungerford on offering smart beta to the masses

Nutmeg’s Hungerford on offering smart beta to the masses | Smart Beta & Enhanced Indices | Scoop.it
Nick Hungerford, CEO of wealth management firm Nutmeg, discusses his investment process and the integral role of low-cost, liquid beta products.
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October 1, 2012 12:18 AM
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From alpha to smart beta

From alpha to smart beta | Smart Beta & Enhanced Indices | Scoop.it

In line with the rest of our industry we are making some changes to the language we use in our marketing and communications. We are writing this letter so we can explain these changes properly. Most importantly, Zilch Capital used to refer to itself as a “hedge fund” but 2008 made it embarrassingly clear we didn't know how to hedge. At all. So like many others, we have embraced the title of “alternative asset manager”. It's clunky but ambiguous enough to shield us from criticism next time around.

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October 1, 2012 12:15 AM
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Smart beta roundtable: where next for exchange traded funds?

Smart beta roundtable: where next for exchange traded funds? | Smart Beta & Enhanced Indices | Scoop.it
A panel of experts gathered at the Four Seasons hotel in London to discuss the key concerns and challenges faced by investors using ETFs, as well as where the key opportunities are in this market.
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October 1, 2012 12:12 AM
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Jury still out over new smart beta ETFs

Jury still out over new smart beta ETFs | Smart Beta & Enhanced Indices | Scoop.it

The European exchange-traded fund market rarely stands still. Despite being ravaged by weak volumes and the heavy scrutiny of regulators last year, the industry has quickly reinvented itself in the first six months of this year, posting promising growth rates and diversifying into new, lower risk products.

 

Among the sectors proving most promising, is smart beta ETFs. These ETFs are often based on alternative indices, which apply different weighting methods to stocks, unlike traditional, market capitalisation-weighted benchmarks.

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