Moody's reports on the increasing popularity of smart beta. The report also noted that while there are many reasons for this trend, one factor is a growing number of people who have been able to get their hands on smartphones. “This next phase will likely place smart beta funds in direct competition with traditional mutual funds, given that future smart beta strategies will not only use multiple factors – such as quality and value – but will also incorporate decision-making processes to determine and actively adjust a fund’s level of exposure to different factors and betas,” the report says. Moody's sees the sector evolving into a more disciplined and cheaper form of active management which will place smart beta funds in direct competition with traditional mutual funds. Most at risk are closet indexers with highly diversified portfolios and firms which cannot differentiate themselves by performance or other services.
Moody's reports on the increasing popularity of smart beta. The report also noted that while there are many reasons for this trend, one factor is a growing number of people who have been able to get their hands on smartphones. Moody's sees the sector evolving into a more disciplined and cheaper form of active management which will place smart beta funds in direct competition with traditional mutual funds. Most at risk are closet indexers with highly diversified portfolios and firms which cannot differentiate themselves by performance or other services.