Strategic Beta: Extensively Recognized, Little Understood


In the case of so-called strategic beta investing, the entrepreneurs have completed their jobs, even when the portfolio managers have but to make their case. Virtually all monetary advisors know what “strategic beta” investing is, however solely one-third really feel they’ve the arrogance to implement it in consumer portfolios, in line with a latest survey.

The survey, by Columbia Threadneedle Investments, discovered 98 p.c of advisors knew concerning the factor-weighted investing fashion, however solely 36 p.c felt they may successfully implement it. Whether or not that’s as a result of they’ve doubts concerning the methods, or really feel they don’t have the technical information to carry purchasers into the portfolios in the appropriate manner, wasn’t clear.

“Sensible advisor training stays important,” stated Marc Zeitoun, Head of Strategic Beta at Columbia Threadneedle Investments. “The perfect funding options received’t assist anybody obtain monetary success in the event that they aren’t applied successfully.”

The highest purpose the survey discovered for incorporating strategic beta right into a portfolio? Enhanced diversification, with 38 p.c of advisors. One-quarter stated it was to achieve entry to the issue weights, whereas 17 p.c stated it was to usher in “lively supervisor insights” right into a passive portfolio.

The survey of 299 advisors additionally discovered that only a few—18 p.c—may identify the fund managers of the strategic beta exchange-traded funds they used repeatedly, whereas 27 p.c may accomplish that for the actively administration mutual funds they used.


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