ETF Trends
ETF Trends

Smart Beta ETF investing continues to gain global assets at a rapid pace, increasing 18.3% in the first eight months of 2017 to reaching a new record of $630 billion.

Independent research and consultancy firm ETFGI reported today that assets were reached at the end of August with US$559.41 billion in the United States, US$46.46 billion in Europe, US$14.99 billion in Canada and US$5.72 billion in Asia Pacific (ex-Japan).

In August 2017, smart beta equity ETFs/ETPs gathered net inflows of US$3.23 billion, marking the 18 consecutive month of net inflows and a level of US$48.86 billion in year to date net inflows which is greater than the US$33.77 billion in net inflows at this point last year.

The latest growth data surrounding the smart beta segment of the ETF industry was welcomed by Rob Bush, ETF Strategist for Deutsche Asset Management.

“Our view is that smart beta approaches enable investors to access a set of stock characteristics that have been shown to partly explain equity returns,” Bush told ETF Trends. “Presumably, the growth in AUM is evidence that these strategies are resonating.”

He added there are many attractive aspects of smart beta portfolios.

“They allow investors to participate in strategies that were once the preserve of institutions, and, in the case of ETFs, to do so easily by trading throughout the day on exchanges, with small minimum investments, and at a relatively low cost,” Bush said.

Bush said Deutsche Asset Management offers a suite of ETFs that take a variety of starting universes and tilt the stocks within those regions towards value, size, momentum, quality, and low volatility – five of the most well-known, and empirically valid factors.

“Put simply, in our view, investors should want relatively cheap, low risk, smaller cap stocks that are producing high quality profits with a positive price trend,” he said.

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