ETF Trends
ETF Trends

By OppenheimerFunds via Iris.xyz

Smart Beta investment strategies are one of the fastest-growing areas of the market. OppenheimerFunds believes Smart Beta can have the potential for better portfolio outcomes including enhanced returns, reduced risks and improved diversification.

Traditional market-cap weighted index funds have a long history and a place in many portfolios, but may be subject to limitations as investors look for more outcome-oriented approaches. To learn more about how investors can potentially benefit over the long run with Smart Beta, we spoke with Mo Haghbin, Head of Product, Beta Solutions; and David Mazza, Head of the Beta Solutions ETF Specialist and Investment Marketing teams in the latest episode of the OppenheimerFunds World Financial Podcast .

Here are some highlights from our conversation.

Brian Levitt: What is Smart Beta? Where did it come from and why is it all the rage all of a sudden?

Mo Haghbin: Smart Beta really is, in my view, more of a marketing term than an investment term. As beta strategies have evolved over time, people are looking for other ways to get beta exposures efficiently, so factor-based investing is, by most people’s views, the start of Smart Beta investing. It’s kind of the philosophical underpinnings of Smart Beta.

David Mazza: Smart Beta is the marketing term for really anything that is a beta-type product, an index-type product that is not weighted by market capitalization. When we think about what it’s doing, it’s looking to harness a factor, and really, these are style factors. I think everybody knows the Morningstar Style Box. We have large value, large blend, large growth – and down. Mid and small. But when we start moving into other types of premias, that’s really what we’re talking about here.

Click here to read the full story on Iris.xyz.