A survey of public investors conducted by the Sovereign Wealth Fund Institute indicates that adoption of smart beta strategies is growing globally.
Among the public institutions surveyed, 67% claim to already have smart beta allocations or are currently in the evaluation process. Of the sovereign wealth funds in the sample, 37% say that they have allocations, while another 25% say that they are currently evaluating a smart beta strategy.
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In terms of popularity, fundamental and low volatility strategies outpace other approaches, being employed by 57% and 52% of those funds with smart beta investments, respectively.
The full survey results will appear in SWFI’s newly published Smart Beta: A Referential Guide for Institutional Investors.
This report, sponsored by Northern Trust, Robeco, State Street Global Advisors and WisdomTree, marks the beginning of a new series of SWFI publications that compile research on speci¬c asset classes to aid institutions in making investment decisions.
Smart Beta: A Referential Guide for Institutional Investors consists of a discussion of smart beta (what it is, why it works, advantages and disadvantages), a Q&A with 8 different public and private institutional investors and a survey of 72 public funds – including 16 sovereign wealth funds – asking about their perceptions and implementation of these strategies.
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By GlobalDataA collection of research papers provided by the sponsors is interspersed throughout the guidebook to offer technical insight into the mechanics of smart beta and factor investing.
"The spread of smart beta strategies among public investors seems to be snowballing worldwide, especially among the larger and more sophisticated institutions like sovereign wealth funds," said Jess Delaney, Research Director at SWFI.
"Although the US and Europe are leading the charge, the results of our survey suggest that smart beta is making inroads with funds in the Middle East and Asia as well, and perhaps to a greater extent than previously reported by other ¬nancial media outlets."
"SWFI is very excited about launching this new line of referential guides for institutional investors, beginning with the current issue on smart beta," said Michael Maduell, CEO of SWFI. "We are honored to have had the opportunity to partner with some of the most prominent ¬rms in the smart beta realm for this inaugural issue."
