Scientific Beta

ETF Strategy: "About two-thirds of ETF users (67%) are using the vehicles to gain exposure to smart beta strategies, a considerable increase compared to 49% in 2014, according to the latest results of the 10th EDHEC European ETF and Smart Beta Survey."

ETF Strategy 08/06/2017

"(...) About two-thirds of ETF users (67%) are using the vehicles to gain exposure to smart beta strategies, a considerable increase compared to 49% in 2014, according to the latest results of the 10th EDHEC European ETF and Smart Beta Survey. (...) The most important motivation for adopting smart beta strategies is to improve performance and manage risk. In terms of the actual product wrapper, respondents favour passive funds replicating smart beta indices (64%) but also use active solutions, albeit to a lesser extent (44%). Replication of smart beta strategies are chosen for the following reasons: costs, transparency of methodology and availability of information, which represent the main reasons why passive strategies are normally selected. Discretionary strategies are preferred for the reactivity and dynamism they allow, with 68% of respondents indicating the ease to change portfolio allocation as the principal advantage. Liquidity and capacity, index construction methodology and transaction costs are respondents most important considerations for assessing smart beta products. There is an important gap between required information and ease of access to this information. For example, data-mining risk and liquidity and capacity, which are crucial for respondents, are among the most difficult pieces of information to obtain. (...)"