The wave of really exciting innovation in ETFs will ultimately be a great thing for end clients because it means that ETF investors will now be getting investment capabilities that exist in other parts of the investment management industry.
As smart beta continues to be a big part of the ETF industry evolution, Yasmin gave a great overview explaining how smart or strategic beta refers to rules based products that do something different than traditional market cap weighting.
“Taking a step back though, you can think of strategic beta as sitting at the intersection of passive and active,” she said. “These are rules based products and so they pull from the benefits traditionally associated with passive investing, including transparency, efficiency and predictability.
She stressed how these products are research-driven, adding that the rules behind their process are different from traditional market cap passive and these deviations are based on academic and portfolio management research.