FTfm: Smart Beta

A cloud looms over smart beta. Despite asset managers rushing to launch a large number of new strategic beta funds in recent years, investors are increasingly wary as questions grow about whether promised above-market returns are materialising

© Bill Butcher

Falling returns have dented the appeal of specialist funds

Some funds are becoming bolder in committing their money to smart beta

Charges and brand recognition play a pivotal role

Rising interest rates threaten to shrink smart beta’s appeal

Investors have never had more choice in the market but some query whether this helps or hinders

Environmental, social and governance concerns feed into product design

Danger facing investors in fixed-income is driving defensive strategies