“Dividend weighted- funds once again led Strategic Beta with $27.6bn of flows this year, more than double the $13.1bn collected in 2012. Many income-seeking investors have turned to dividend stocks as bond alternatives in a persistent low-interest rate environment,” according to BlackRock. [Smart Beta Outlook Shines]
Data for the Cogent/PowerShares study were collected from 193 participants between September 5 and October 2, 2013. A 15-minute online survey was administered by Cogent Research, a division of Market Strategies International, to institutional decision makers, including pensions, endowments/foundations, non-profit institutions, mutual funds, as well RIAs who manage institutional assets.
All institutions had at least $20 million in assets and allocated at least 1% of their assets to ETFs. Institutional RIAs had at least $25 million in assets under management – a portion of which was managed on behalf of institutional investors, according to the statement. [Institutions to Increase Use of Smart Beta ETFs]
It appears that going forward, increased awareness and education will be pivotal to the success of intelligent index ETFs. Those that have yet to embrace smart beta ETFs frequently cite a lack of familiarity and 34% of institutional decision makers are unfamiliar with smart beta funds, according to Cogent and PowerShares.
Eight of the top-10 PowerShares ETFs in terms asset gathering over the past year can be considered smart-beta ETFs, including the PowerShares Buyback Achievers Portfolio (NYSEArca: PKW), PowerShares FTSE RAFI US 1000 Portfolio (NYSEArca: PRF) and the PowerShares S&P 500 High Beta Portfolio (NYSEArca: SPHB).
Data Courtesy: Cogent Research, PowerShares