The development of smart beta strategies represents an opportunity for individual and institutional investors, as it expands the toolkits investors can use in their portfolio construction and asset allocation. As investors become increasingly aware of the potential benefits and risks of smart beta strategies, the adoption of smart beta may continue to gather pace over the coming years. In particular, investors may increasingly take a multi-factor and multi-asset-class approach to smart beta investing, where they aim to harvest risk premia across asset classes via efficient and low cost vehicles.

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This article was written by Xiaowei Kang, Senior Director, Co-Head of Global Research at S&P Dow Jones Indices.

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