Quant Research Debunks the Hype Behind Smart-Beta Investing
- Study finds portfolio adjustments ‘completely explain’ returns
- Outperformance not attributable to factor tilts, authors say
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Given the amount of criticism smart-beta investing has faced lately, new research confirming its outperformance should be a welcome change. Unfortunately even that comes with a sting.
A new paper has demonstrated the superiority of these strategies, which attempt to blend the best of active and passive with a quant approach known as factor investing, usually wrapped in exchange-traded funds.