Smart beta equity ETF strategies have quickly garnered a large following among investors seeking to diversify their stock portfolios and potentially enhance returns. Now, some are beginning to eye smart beta options for their fixed-income portfolios.
According to a recent survey of financial advisors and investment managers conducted by Columbia Threadneedle Investments, around 42% of investors are either already invested in strategic beta or smart beta fixed income ETFs or would explore purchasing one. Meanwhile, another 27% of participants indicated that they might consider purchasing a fixed-income strategic beta ETF.
“With considerations like diversification and total return, fixed income solutions in the form of strategic beta ETFs can be extremely attractive and the key for advisors will be in identifying options that follow a thoughtful benchmark and offer a unique mix of the right investments,” according to Columbia Threadneedle Investments.
When looking at a fixed-income strategic beta portfolio, participants pointed out that the track record and the firm’s expertise as an active fixed-income manager were among the top considerations cited when purchasing a product, at 20% each.
On the other hand, the least factor up for consideration was price, with just 9% of respondents indicating it influenced their decision to purchase the fixed-income strategic beta ETF.