Smart beta ETFs – Euphemism par excellence

Few trends on capital markets have received so much attention as the strong growth of exchange traded funds (ETFs). Within this asset class, the so called smart beta (SB) products enjoy ever growing popularity.

Contrary to a classic ETF, which is supposed to faithfully replicate the performance of a market index, the label “smart” suggests that these smart ETFs are able to beat the broad market. This should be achieved through a modified weighting strategy of single portfolio members from the broad index.

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