Scientific Beta

Risk.net: "ERI Scientific Beta, the indexing arm of EDHEC-Risk Institute, will launch an equal-weight "smart factor" index on April 14, in its latest attempt to synthesise investment styles that have found an enthusiastic audience among institutional investors, who believe these strategies can provide them with an edge over broader cap-weighted indexes. By applying smart beta weighting to multiple factor exposures within a single index, ERI is advancing a project it began in February to provide institutions with a combination of smart beta and risk factor investing within one strategy."

Risk.net 21/02/2014

"(...) Products that fuse smart beta strategies with factor tilts to provide multi-beta, multi-strategy exposure to global stocks are coming to European exchanges. (...) ERI Scientific Beta, the indexing arm of EDHEC-Risk Institute, will launch an equal-weight "smart factor" index on April 14, in its latest attempt to synthesise investment styles that have found an enthusiastic audience among institutional investors, who believe these strategies can provide them with an edge over broader cap-weighted indexes. By applying smart beta weighting to multiple factor exposures within a single index, ERI is advancing a project it began in February to provide institutions with a combination of smart beta and risk factor investing within one strategy. Amundi and Morgan Stanley are said to be rolling out exchange-traded funds (ETFs) linked to the index, pending regulatory approval. Aimed at institutional investors, the ETFs will be the first fruits of strategic partnerships struck earlier this year between the providers and ERI. The Scientific Beta Developed Multi-Beta Diversified Multi-Strategy Equal-Weight Index gives exposure to global equities with four factor tilts: value, size, momentum and low volatility. Five different weighting mechanisms are applied to each factor, providing the smart beta filter. "Smart factor investing is an approach that takes all the ingredients we have and allows us to design indexes which are both "smart" in terms of the weighting scheme and explicit in terms of the factor tilt," said Felix Goltz, Nice-based research director at ERI Scientific Beta and head of applied research at the EDHEC-Risk Institute, speaking at the EDHEC-Risk Institute conference in London on Tuesday. Goltz called the multi-factor index an advance over previous ERI indexes that use only a single factor tilt because an average of multiple factors "should lead to more robust outperformance". (...)"