Smart beta strategies are "smart" because they take a scientific, quantitative and objective approach to investing by combining a range of index-tracking ETFs with different market risk or "beta" exposures.
In contrast to the opacity of hedge funds, dynamic allocation "smart beta" investment strategies should do what they say on the tin.
For example, Elston runs a number of diversified multi-asset investment strategies, two of which have been offered as indices for asset owners and investment managers to benchmark against or track.
Looking at outcomes
Elston's multi-asset Global Max Sharpe index (Bloomberg: ESBGMS) did what it said on the tin delivering a Sharpe ratio (the primary measure of success for this strategy) of 2.06 for 2016, compared to 1.94 for Equities, 1.90 for Bonds and 1.45 for Commodities. On a returns basis (the secondary… Read More …