Scientific Beta

Wealth Adviser: "Key challenges in the use of smart beta lie in the lack of access to data, in particular live and after-cost performance, especially as for all types of risks, respondents agree that information is not widely available from product providers."

Wealth Adviser 30/07/2015

"(...) Between January and February 2014, EDHEC-Risk Institute carried out a survey among a representative sample of 128 investment professionals to identify their views and uses of alternative equity beta. The study found that investors are familiar with the construction principles of advanced beta strategies, but less familiar with underlying risks and drivers of performance. According to EDHEC-Risk Institute, this lack of knowledge on risks poses a problem not only for the proper use of these alternative equity beta strategies, but also with respect to them being fairly marketed. (...) Key challenges in the use of smart beta lie in the lack of access to data, in particular live and after-cost performance, especially as for all types of risks, respondents agree that information is not widely available from product providers. (...) Implementation is a key aspect for respondents, the study found, as they commonly use a wide array of measures to assess implementation of alternative equity beta strategies (turnover, transaction costs, etc.), implying that product providers need to carefully consider implementation in product design. (...)"