Factor investing can boost your hedge fund allocation.
Institutional money managers are increasingly turning to ETFs, citing liquidity, transparency and ease of implementation.
Smart beta can be considered an interesting alternative to investing in market-cap weighted indexes.
Questrade Wealth Management launched six exchange-traded funds on the Toronto Stock Exchange.
Towers Watson’s institutional investment clients around the world allocated over $8 billion to smart beta strategies last year, bringing the total exposure to around $40 billion (in 550 portfolios) in these strategies, across a range of asset classes.
Smart beta indexes can be a useful de-risking tool
A low-volatility portfolio can bring good returns without great risk, but building that kind of portfolio is not as simple as finding low-beta stocks. Investors need to be aware of risks and, when they consider investing aboard, they need to understand whether they should engage in currency hedging.
A survey finds that smart beta indexes are being sought by institutional investors for their investment utility, helping to achieve broader portfolio objectives such as risk reduction and return enhancement more than basic cost savings.
A report by Cogent Research on behalf of Invesco says about one-quarter of institutional decision-makers use smart beta exchange-traded funds that number is expected to rise.
Towers Watson’s institutional investor clients made more than twice as many new investments in smart beta strategies during 2013.