Low vols still the top smart beta strategy: poll

Low volatility continues to be the most popular smart beta strategies of institutional investors, FTSE Russell says.

The company surveyed 253 asset owners in January and February. It polled the largest institutional investors in North America, Europe and Asia on their use of smart beta indexes, which are not traditionally market-cap weighted.

Investors are turning to new indexes because the conventional market-cap index is seen as less reliable in a climate characterized by economic uncertainty and market volatility.

Read: Is smart beta the fourth line of investing?

FTSE Russell released new 2016 survey data on Thursday showing the most popular smart beta indexes are low volatility (46%), value (41%) and multi-factor combination (37%) indexes. Less commonly used were fundamental (30%), momentum (22%) and high quality indexes (22%), FTSE Russell says.

Low volatility smart beta strategies had declined slightly, from 49% in the same survey in 2014.

Total assets under management for this year’s survey respondents was estimated at over US$2 trillion.

Says Jackie O’Flanagan, head of Canada for FTSE Russell: “[W]hile many asset owners have increased their understanding and implementation of smart beta, continuing innovations in other asset classes and the multi-factor arena underscore the need for more information and education.”

Read: Insights into portfolio management

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.