Scientific Beta

Financial Times: "These design choices are part of the problem for Felix Goltz, research director at ERI Scientific Beta. He argues the packaged strategies index providers often contain hidden risks: investors are not just exposed to factor risks but also country, sector, industry or market risks. ERI Scientific Beta unbundles smart beta strategies to provide explicit choices — and in the process offers several thousand indices itself. The approach allows investors to make explicit choices in line with their investment beliefs and desired exposures, says Mr Goltz."

Financial Times, Special Report, Smart Beta, 05/11/2018

"(...) These design choices are part of the problem for Felix Goltz, research director at ERI Scientific Beta. He argues the packaged strategies index providers often contain hidden risks: investors are not just exposed to factor risks but also country, sector, industry or market risks. ERI Scientific Beta unbundles smart beta strategies to provide explicit choices — and in the process offers several thousand indices itself. The approach allows investors to make explicit choices in line with their investment beliefs and desired exposures, says Mr Goltz. “We offer an index that does adjust for, say, sector risk, and one that doesn’t.” Investors should also pay attention to factor definitions, he says. “We follow the standard definitions in academic research. We don’t think investors should take index provider specific definitions. If you design your own value definition, for example, you don’t have independent research to back it. So the only reason to adopt it is because it gives better performance in a backtest. If there is no strong reason why a factor should outperform — as soon as it is documented, it is likely to disappear.” (...)"