Scientific Beta

ETF Strategy: "The results point to significant growth in assets under management and product launches in the coming years, driven by a belief that these strategies can beat market capitalisation-weighted indices and the evolution of their role in the portfolio construction process."

ETF Strategy 30/06/2015

"(...) A quarter of investors are using smart beta strategies according to the 2014 EDHEC Risk Institute survey of ETF usage, with half of those employing ETFs to implement these strategies. The survey, produced with the support of Amundi, a leading European ETF provider, provides an optimistic outlook for the smart beta industry. The results point to significant growth in assets under management and product launches in the coming years, driven by a belief that these strategies can beat market capitalisation-weighted indices and the evolution of their role in the portfolio construction process. Acceptance of smart beta in the investment community is high with 71% of respondents agreeing that the strategies have the potential to beat market capitalisation-weighted indices and 40% considering investment in such strategies in the near future. Investors appear to be optimistic that individual factors will be rewarded too, however this varies according to the factor in question. The survey shows that the highest level of confidence is in the value and size factors while low volatility received the lowest rating. Investors’ waning belief in low volatility strategies is perhaps reflective of expectations that the popularity of this strategy following the financial crisis has competed away prospective returns. (...)"