The intelligent ETF

Smart beta ETFs are a cross between active and passive funds.

In a recent article, Canadian Investment Review’s Caroline Cakebread says, “The funds let investors tilt weightings in a benchmark index to suit their preferences. And for those looking for exposure to certain market segments, ETFs with a smart beta twist allow them to factor in momentum or volatility over and above the main index.”

She also reveals Towers Watson finds these “intelligent funds” have many early adopters, adding the global ETF industry is quickly responding to its investors’ growing need for new fund solutions.

In Canada, however, we have a long way to go, according to Yves Rebetez at ETF Insight. He says, “Thus far, in Canada, we haven’t yet witnessed the same level of responsiveness.”

Read Caroline’s full article, for more on how pension funds may be adopting more passive strategies, and on whether smart beta could serve their needs.

Read:

Is smart beta smarter?

Combining ETFs with active maangement

More advisors using ETFs to mitigate risk