A few years ago Vincent Deluard was a huge cheerleader for smart-beta ETFs, which slice and dice the market using indexes tuned to classic investing factors like momentum and value.
But times change and so has Deluard’s take on factor-based exchange-traded funds. With smart-beta portfolios becoming increasingly popular, the global macro strategist at INTL FCStone Financial Inc. recently reached the conclusion that the strategies aren’t as shrewd as they seem. So he set out to prove it by building his own “DUMB” portfolio. The results were enlightening.
