How Smart Is Smart Beta?

Smart Beta strategies—quasi-passive portfolios promoted for their potential to add value over ordinary benchmarks by exploiting market inefficiencies—are proliferating and attracting assets at a rapid clip.  However, what these strategies deliver is not strictly beta.  And they often do not take account of relative valuations or broad market conditions, which would be the smarter course of action, in our view.  Tim O’Hara, Co-Chief Investment Officer at Strategic, examines the virtues and limitations of Smart Beta strategies. Tim illustrates how some of the insights of these strategies, if applied judiciously, can contribute to intelligent portfolio management. Click Here to View How Smart is Smart Beta? in the Videos and Multimedia gallery. Click Here to Download the Fiduciary Insights Publication