Enter smart beta

Our hearts are often more than the benchmark return: Weall want to be above average! Enter smart beta.

There have been forces – often powerful ones – that have driven market prices away from the pack in a predictable way, such as the way so-called value stocks or low volatility stocks tended to outperform over the long term. Many of these ideas have been featured in actively managed portfolios for decades. Smart beta allows investors to capture these themes at a fraction of the cost.

That’s actually the catch: You have to be willing to look past the daily market coverage and invest for the long haul.  The good news is that smart beta factors have generally not been correlated with each other – that is, each factor tends to be rewarded at different times of the economic cycle



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