Scientific Beta

aiCIO: "Furthermore, three-quarters of respondents believed smart beta indexes provided “significant potential to outperform cap-weighted indexes in the long term,” the survey found. However, investors argued there is room for further product development, especially since product launches have focused on only a few popular strategies such as value premium and defensive equity."

aiCIO 16/03/2016

"(...) Institutional appetite for exchange-traded funds (ETFs) and smart beta indexes is soaring, according to EDHEC-Risk Institute and Amundi’s latest survey. (...) Investors were likewise bright about the use of smart beta ETF products. In 2015, 68% of respondents used ETFs to invest in smart beta, a significant increase from 49% in 2014. Smart beta ETFs also received an 86% satisfaction rate in 2015, compared to 74% in 2014. Furthermore, three-quarters of respondents believed smart beta indexes provided “significant potential to outperform cap-weighted indexes in the long term,” the survey found. However, investors argued there is room for further product development, especially since product launches have focused on only a few popular strategies such as value premium and defensive equity. Some 94% also agreed that smart beta indices require full transparency on methodology and risk analytics. “Transparency is not only the best protection against the risks arising from conflicts of interests, but it is also instrumental in improving the informational efficiency of the indexing industry,” EDHEC and Amundi concluded. The two firms have partnered on creating and selling factor-tilted ETFs. (...)"