The Case Against Smart Beta Funds?
June 3, 2015 - Big Ideas
Smart beta strategies weight stocks according to one or a few historically predictive factors such as value, size, momentum or volatility rather than market capitalization. What are the cautions for investing in smart beta funds? In their April 2015 paper entitled “Smart Beta: Too Good to be True?”, Bruce Jacobs and Kenneth Levy critique the belief that smart beta strategies beat the market simply and cheaply. Using selected observations and citing some past research, they conclude that: Keep Reading