The Smart Beta Channel

Are Low Vol ETFs as Smart as They Sound?

“Smart Beta” ETFs and their low-volatility ETF progeny may deliver a lower beta against their relevant benchmarks, but they’re not immune to bouts of volatility, and their returns frequently come up short.

Storm Advisory—What You Need to Know Now

In July, the Institute for Supply Management’s (ISM) Non-Manufacturing Index fell to an 11-month low of 53.9, 3.5 points below its June reading of 57.4. The index measures the non-manufacturing, services industries such as food services, education, real estate, health care and more.

Factor Fitness: Understanding Equity Exposures

Equity factors are increasingly used by investors to help guide their portfolio allocations. So it’s important to have a good grasp of what factors are and how they perform through an economic cycle, in order to invest effectively.

A Smart Beta for Sustainable Growth

We demonstrate a smart beta that produces positive excess returns from sustainably faster growth in EPS. This simple, systematic strategy represents a significant improvement from today’s growth indices that fail to produce faster growth in EPS and have provided negative excess returns.

Dynamic Asset Allocation for Practitioners Part 1: Universe Selection

In 2012 we published a whitepaper entitled “Adaptive Asset Allocation: A Primer” in which we built upon the simple, robust momentum framework proposed by Mebane Faber in his 2009 study “Relative Strength Strategies for Investing.”

Building the Perfect Barbell

Investors who want to reduce risk and maintain a steady income might consider a barbell strategy that pairs interest rate–sensitive bonds with high-yielding credit assets. But first, it’s important to strike the right balance.

Factor Investing - a Time to Tilt

In my many conversations with investors and industry peers about factor investing, one topic seems to always come up: factor investing timing. I’ve had recent discussions on this topic with a central bank whose managers need to think about preserving capital and with a more nimble RIA team which explicitly wants to use timing to pursue incremental returns.

On My Radar: Opportunity Lies in Despair Not Euphoria

I listened to Bob Farrell several times a week. Bob was the chief stock market analyst at Merrill Lynch. Do you remember those old “squawk boxes?” On my desk sat a small speaker box. It was the firm’s way of communicating to the thousands of brokers.

Weighing the Week Ahead: How Strong is the Labor Market?

A holiday-interrupted week is loaded with important economic data. Since many market participants will skip Monday to stretch their weekend, the action will focus on Friday’s employment situation report.

Three Reasons to Consider Bank Stocks

Valuations and regulations are among the trends that we’re watching in this industry.

How Strong is the Labor Market?

A holiday-interrupted week is loaded with important economic data. Since many market participants will skip Monday to stretch their weekend, the action will focus on Friday’s employment situation report. People will be asking: Just how strong is the labor market?

Are You Underweight FANMAG? Chillax!

The first half of 2017 is shaping up to be unequivocally brutal for value-oriented rebalancing strategies. Wired to avoid pain, we humans know it’s very tempting to ask whether a model or philosophy is broken, especially the moment it dashes expectations.

On My Radar: David Rosenberg — Notes from the 2017 Strategic Investment Conference (Part 5)

This week, I’d like to draw to a conclusion my series of notes from Mauldin’s 2017 Strategic Investment Conference. The topics ranged from geopolitical to global macro to specific investment ideas. One of my all-time favorite economists is David Rosenberg. Today I offer my high-level bullet point notes from his presentation.

You Might be a Robo-Advisor If…

In a nod to comedian Jeff Foxworthy’s signature “You might be a redneck” shtick, the following parody offers real-life examples of why, contrary to popular perception, talented, experienced financial advisors have absolutely nothing to fear from the invading robot army:

Active vs. Passive

Many investors seem to be stuck in the middle of the false dichotomy between active and passive investing. At RBA, we argue it’s much more important for investors to ascertain which active or passive portfolio to buy and when to own it.