Scientific Beta

Asia Asset Management: "Smart beta strategies have established a space in between traditional capitalisation-weighted passive investment and traditional active management. Perhaps unsurprisingly, smart beta has drawn criticism from advocates of both traditional active management and of traditional passive management. Proponents of proprietary active strategies complain that smart beta is not active enough while proponents of traditional cap-weighting say that smart beta is not passive enough."

Asia Asset Management July 2017

Article by Felix Goltz, head of applied research, EDHEC-Risk Institute, research director, ERI Scientific Beta

"(...) Smart beta strategies have established a space in between traditional capitalisation-weighted passive investment and traditional active management. Perhaps unsurprisingly, smart beta has drawn criticism from advocates of both traditional active management and of traditional passive management. Proponents of proprietary active strategies complain that smart beta is not active enough while proponents of traditional cap-weighting say that smart beta is not passive enough. Smart beta providers have not only responded to such criticism, but have also been vocal about the benefits of their respective approaches, without necessarily agreeing with one another. Such debates have too often led to misconceptions. A recent EDHEC-Risk Institute paper reviewed ten common but mistaken claims about smart beta, and shed light on the underlying issues. (...)"