I published a byline in Financial Advisor Magazine about trying to define the term “smart beta” as I felt the topic was both relatable and helpful to the advisor community that reads the publication.
The term smart beta has been utilized to describe so many different types of exchange-traded funds (ETFs) it can be a confusing exercise to try an incorporate smart beta into a portfolio. For this reason, I offered background on the origin of smart beta, as well as some rationale for the interest in the space, leading up to the essential question, “Should you recommend smart beta indexes to your client?”
My conclusion, which can be found on the Financial Advisor website under the title, “What Smart Beta Isn’t”, offers questions to consider when deciding if smart beta fits a specific investing objective. By shifting investing smart beta to an implementation decision, rather than an investment decision, perhaps advisors can make a more informed decision in the ETF category known as smart beta.