Scientific Beta

Financial Times: "In recent years, in both the US and Europe, there has been increasing talk of the pre-eminence of indexation in asset management. As such, in two of our studies analysing new index offerings and investor reactions in both Europe and North America, these investors have provided evidence of their increasing appetite for passive investment and their interest in new forms of indexation, also known as “advanced” or “smart” beta."

Financial Times 11/02/2013

(...) In recent years, in both the US and Europe, there has been increasing talk of the pre-eminence of indexation in asset management. 

As such, in two of our studies analysing new index offerings and investor reactions in both Europe and North America, these investors have provided evidence of their increasing appetite for passive investment and their interest in new forms of indexation, also known as “advanced” or “smart” beta. 

More than 40 per cent of investors have already adopted alternative weighting schemes and more than 50 per cent see their current market capitalisation-weighted indices as problematic. 

In fact, the reason behind the new indices for the vast majority of investors, and doubtless their promoters, is probably the superiority of their performance compared with traditional cap-weighted indices. Everyone agrees that while cap-weighted indices are the best representation of the market, they do not necessarily constitute an efficient benchmark that can be used as a reference for an informed investor’s strategic allocation.

Naturally, each smart index solution contains risks, which can be filed in two categories: systematic risks and specific risks. (...)

Copyright Financial Times