Hoshang Daroga: Smart investment thinking

Smart beta portfolios

clock • 4 min read

Smart beta portfolios, which hold stocks based on certain investment characteristics such as size, volatility or yield, are the natural evolutionary next step for ETFs, writes Hoshang Daroga

The so-called active versus passive debate seems everlasting, with industry pundits battling it out tooth and nail - and yet can passive investing ever be said to be totally passive? After all, before we even think about deciding between using ETFs or actively managed funds, we make a very important decision about where to invest the money - in stocks, in bonds, in commodities and so forth. There is no shortage of research that suggests this asset allocation decision is a primary driver of returns in any portfolio. Even the decision not to invest money and hold it in cash is an ‘active' ...

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