“Nearly 30% of respondents said they purchased a smart-beta ETF to replace an actively-managed mutual fun,” according to the BBH survey.
As more look to smart beta strategies, investors should understand that all these fancy appellations basically cover rules-based indexing methodologies that implement factor-based screens, such as value, quality, size, momentum and volatility, among others. Investors can also combine these individual factors into a multi-factor strategy in an attempt to further diversify risk.
“Seventy percent of smart beta ETF users are searching for risk mitigation or volatility control,” notes BBH.
In terms of where ETF users would like to see more ETFs, respondents in the U.S., Europe and greater China all would like to see more fixed income ETFs, according to the BBH survey.
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