Industry Updates

Smart beta? Or dumb beta? - News Roundup

David Tuckwell

Smart beta not so smart

Smart beta ETFs are based on the assumption that investment factors can be timed. But can they? Maybe not. Controversial new research by influential quants suggests that the all the success of factor investing owes to relative valuation. This means that other factors don't really matter.

Active managers will prove themselves during a crisis

The major change in investing the past 15 years has been the rise of passive investing. That's fine for now as we're in a long and extraordinary period of crisis-free, low interest rate asset growth. But when the next financial crisis comes, the worth of active managers will reveal itself.

Shorting: a cheap way to get ETFs

The best way to get cheap ETFs is to look for short sellers. With ETF issuers making most of their money out of securities lending, often to short sellers, this option is becoming increasingly common among traders. But will it come to retail investors? We'll have to see.


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