Home Breadcrumb caret Investments Breadcrumb caret Market Insights Institutional investors turning to smart beta ETFs Institutional money are increasingly turning to ETFs, citing liquidity, transparency and ease of implementation. By Staff | June 3, 2015 | Last updated on June 3, 2015 1 min read Institutional money managers are increasingly turning to ETFs, citing liquidity, transparency and ease of implementation. In particular, institutional investors have expressed a growing interest in smart beta ETFs, finds an Invesco PowerShares survey. Read: Specialty ETFs let you invest like Buffett, Icahn Smart beta indices employ alternative security selection and weighting criteria with the goal of outperforming a market-capitalization-weighted benchmark or reducing risk. Smart beta ETFs captured over 17% of total U.S. ETF equity inflows in 2014, despite representing only 11% of institutional ETF assets. Thirty-six percent of institutional investors used smart beta ETFs, up from 24% in 2013, while the mean allocation rose to 13% from 7%. Performance was the primary motivator for smart beta ETF usage for 22% of the survey’s 253 respondents, followed by reducing volatility (19%) and seeking exposure to specific assets (15%). Advisor industry contributor Mark Yamada breaks down smart beta basics: “Fundamental indices and value based funds tend to outperform [market cap weight] at the same time, affirming a value bias. These are active tilts that can be used independently or in combination with other strategies.” Read more here. Also read: Celebrate 25 years of ETFs Get smart about smart beta Staff The staff of Advisor.ca have been covering news for financial advisors since 1998. Save Stroke 1 Print Group 8 Share LI logo