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$429,000,000,000 In Smart Beta ETFS & Growing

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Posted on: 04.08.2016

With solid academic basis, and low costs relative to active mutual funds, and some tax advantages, it’s no secret that smart beta has been one of the hottest trends in investing for the last couple years.   In fact, those benefits with the chances to earn some Alpha prompted my interest and investment in smart beta, and the start of this website.

According to data from ETFGI’s June 2016 global smart beta ETF and ETP industry insights report, the total assets invested in smart beta etfs globally has hit a record $429 billion.  That’s up 7.1% year to date (through June 2016) from 400 billion at the start of the year.

The bulk of the $429 billion dollars is held abroad.  Here’s a breakdown:

  • United States $390.2 billion
  • Europe $26.70 Billion
  • Canada $9.44 billion
  • Japan $832 million <—– thats million, not billion.

On a monthly basis, June saw net in flows to smart beta of $5.70 billion.  Volatility factors collected the largest chunk of that with $2.17 billion.

That’s no surprise to me as volatility seems to be the one factor which can certainly be harnessed… and these is no fuss about a return premium.  We can’t say if value or momentum will out perform the market, but we can confidently lower volatility.  Of course that comes at the expense of returns but investors looking for lower volatility are generally fine with earning less than market returns.

Corey Philip

Corey Philip is the founder of RealSmartBeta.com. His focus is on expanding investor knowledge of Smart Beta ETFs and quantitative investing. Learn more about Corey in the 'ABOUT' section of this website.

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