(New York)
Advisors considering putting client capital into smart beta funds need to be prepared for what to expect. The reality is that smart beta strategies tend to accentuate the returns of the market, or run counter to them altogether. In up times a smart beta strategy playing into the market’s strengths can do much better than the index overall, the opposite can happen in down markets. However, even in decent markets, many smart beta strategies can perform terribly because of the nature of the rise.
FINSUM: If you are just getting into smart beta funds, it is really important that you understand the strategy inside and out to make sure you understand how it will sit within your portfolio.