Of institutional investors surveyed by Russell with more than $100 billion in assets, 88% “have evaluated smart beta or plan to do so in the next 18 months; 77% of respondents with assets between $1 billion and $10 billion, and 50% of those with assets under $1 billion responded similarly,” said Russell.
“A study conducted by Cogent Research, a division of Market Strategies International, indicates that more than half (53%) of institutional decision makers will increase their use of smart beta ETFs over the next three years—that’s more than any other ETF category, including market cap-weighted ETFs (48%),” according to WisdomTree.
Of the six largest U.S. ETF issuers, three – Invesco’s (NYSE: IVZ) PowerShares, WisdomTree (NasdaqGS: WETF) and First Trust – feature fund lineups that are dominated by strategic beta offerings. Additionally, iShares and State Street Global Advisors, the two largest U.S. ETF sponsors, are increasing their alternatively-index lineups. [Smart Beta ETFs Could Lift These Stocks]
WisdomTree has 10 ETFs with over $1 billion in assets under management, nine of which can be considered strategic beta ETFs.
First Trust offers nearly 40 AlphaDEX ETFs, a group of strategic beta funds based “on growth factors including three, six and 12-month price appreciation, sales to price and one year sales growth, and, separately, on value factors including book value to price, cash flow to price and return on assets,” according to First Trust.
Those ETFs have been primary drivers of First Trust’s rapid asset growth. PowerShares, the fourth-largest U.S. ETF issuers, features over 50 broad market, dividend, industry or sector funds that can be defined as strategic beta products. [AlphaDEX ETFs Drive First Trust’s Growth]