The Smart Beta Channel

(Mis)Defining Quality: Counting When It Cannot be Counted

This article will limit itself to a specific component of yet another boom – the boom in the involvement of PhDs and quants in financial markets and the newly discovered quality factor.

Pactive® Investing

Historical studies show individual investors are very poor asset allocators, and are undoubtedly no better at selecting ETFs. At RBA, our Pactive® Management portfolios combine the benefits of low-fee, transparent and liquid passive investments with RBA’s asset allocation expertise.

Shundrawn Thomas on the State of the ETF Industry

Shundrawn Thomas serves as Northern Trust’s executive vice president, head of funds and managed accounts group. I spoke to him about his annual president’s perspective on the ETF industry, which was just released.

The Rise of Passive and Indexed Investing, and its Effect on Market and Liquidity Risk

Dramatic growth offers significant opportunity for the index fund industry, but not without its risks. As assets move from active to passive management, what systemic danger lurks? What market disruptions might occur with a concentration of assets backed by monolithic indexes on autopilot?

Forecasting Factor and Smart Beta Returns (Hint: History Is Worse than Useless)

In a series of articles we published in 2016, we show that relative valuations predict subsequent returns for both factors and smart beta strategies in exactly the same way price matters in stock selection and asset allocation.

The Myth Of The “Passive Indexing” Revolution

There is little argument that Exchange Traded Funds, more commonly referred to as “ETF’s” have and will continue to change the landscape of investing.

A Smoother Path to Outperformance with Multi-Factor Smart Beta Investing

  You can outperform the market with substantially lower relative risk by diversifying across simple smart beta strategies based on a half dozen robust factors. Dynamically rebalancing these factor-based smart betas significantly improves returns.

Morningstar Promotes ETFs to the Big Leagues

At long last the fund rating company, Morningstar, has decided to put mutual funds and exchange traded funds (ETFs) on a level playing field when it comes to fund ratings and comparisons.

How Not to Get Fired with Smart Beta Investing

It may not be my money, but it is my job. — Charles Ellis in Investment Policy: How to Win the Loser's Game

ETF Trends to Watch in 2017

The turn of the calendar to a new year brings new year’s resolutions—and predictions. While many market pundits are now making their prognostications for the year ahead, David Mann, head of Capital Markets, Global Exchange-Traded Funds (ETFs), doesn’t claim to have a crystal ball that will reveal where the market is headed next.

2017 ETF Top Trends and Insights

The Year of the Dynamic ETF With the world digesting the surprising results of the 2016 U.S. Presidential Election, the team at IndexIQ has turned their thoughts to next year and their top five ETF-focused trends and insights for 2017.

The Myths and Fallacies about Diversified Portfolios

For many years “alpha” – outperformance of the market on a risk-adjusted basis – was the Holy Grail of investment. Almost all money managers claimed they could produce it. It turned out that few could. Now a new Holy Grail: diversification. But there is little agreement as to what it means.

92% of US Financial Stocks Are Above 50-Day Moving Average and Other Market Internal Stats

For the past couple of months, and especially since the US presidential election, US financial stocks have been on a great run. On an equal-weighted basis, US mid and large cap financial stocks are up a scorching 16.7% over the past 50 days.

Rollercoaster Rides

The fourth quarter of 2016 was a profitable period for globally diversified multi asset managers. All major domestic large cap indices were up for both the quarter and the year.

A Prediction for the Future of Active Management

What effect will the index fund revolution and the Department of Labor’s (DOL) fiduciary rule have on active managers? The data shows that active management is still a healthy business model. But industry consolidation is coming and advisors will need to change the way they construct portfolios.