Advancements in Smart Beta Index DesignOct 31, 2017

Key Points

Advancements in Smart Beta Index Design:
Not All Factors Are CreatedEqual

Since the 1970s, investment strategies that seek to track cap-weighted indexes have become an increasingly popular choice for many investors. While these strategies offer broad market exposure, they also have limitations.

This paper explores some of the shortcomings of cap-weighted index investing and presents the results of our research, which suggests that designing an index around criteria other than market cap may offer investors an attractive alternative.