The growth of smart-beta strategies has been staggering, but quite top heavy.
Meaning, most assets have flowed to factor-based strategies and dividends. I have written in the past about a subcategory of smart beta that I call characteristic indexes. These indexes highlight a business characteristic that active investors often seek through a passive vehicle.
Many of the ETFs that follow these indexes are categorized by ETF.com as “Alpha-Seeking.” These ETFs allow investors to access buy-backs, spin-offs or IPOs in a low-cost, tax-efficient manner.