Smart beta strategies are likely to become mainstream investment options in the coming years, according to new data compiled by VanEck Australia.
A survey of Australian investors organised by VanEck revealed that only 37 per cent of financial professionals presently use smart beta strategies, but the firm also noted that close to two thirds of respondents said they had not invested since they did not know enough about the strategies to feel comfortable.
The survey also found that more than 90 per cent of respondents would consider investing in smart beta strategies in the future, and VanEck Australia managing director Arian Neiron commented that this showed smart beta was “moving from the periphery to a mainstream investment option”.
“In 2011 there was $250 million invested in smart beta strategies that predominately focused on equity income; today there are a number of different smart beta strategies which total in excess of $2.1 billion in assets, confirming the incredible growth of smart beta investing in Australia,” he said.
In addition, 89 per cent of respondents said they believed smart beta strategies would outperform or perform in line with active strategies, and this opportunity for outperformance was given as a prime motivator to start investing in the strategies, alongside diversification and ease of trading.
As understanding of these strategies increases, Mr Neiron said, their inclusion in portfolios is also likely to see an increase.
“It is likely that smart beta strategies will become more prevalent in portfolios in the future; however, there is still a need for more education to ensure advisers and clients have adequate information to confidently invest in smart beta strategies,” he said.
A longer-term rethink of the merits behind the Commonwealth Bank’s demerger of its wealth management business could see it retained under ...
Macquarie Group is well placed for growth in its wealth management, according to Morgan Stanley, which expects the bank’s gross infl...
Westpac has made changes to its wealth management and leadership, with it expecting to save around $73 million. ...