The Smart Beta Solution

​Smart beta products offer a way for investors to diversify their index-based strategies, while retaining many of the benefits of traditional indexing, such as transparency, diversification, high capacity, liquidity, and relatively low implementation costs. Although not yet widely available, derivative contracts on smart beta indices are on the horizon and could provide significant portfolio enhancement and risk management capabilities for asset owners and money managers in the years to come. This article provides an overview of smart beta categories and trends, market perceptions and implementation approaches.