Advisers pass on giving smarter beta an A-grade

3rd February 2014

This article was originally published on Quadrant Group’s website. Quadrant Group was acquired by Progeny in March 2017.

Bob Wilson and Dominic Lobo are among advisers voicing caution over smarter beta funds that track indices built in novel ways to reduce volatility or enhance returns.

Advisers have reacted with caution to so-called smarter beta funds, which track supposedly more intelligent indices that are not weighted to market capitalisation.

Chartered financial planner Darren Baker of Weston-super-Mare-based QED Wealth Management, who is chairman of passive investor group Evidence Based Investment Solutions (Ebis), said Ebis would formally review a number of smarter beta solutions during 2014.

‘The argument that we are buying stocks that have not had their day in the sun sounds plausible,’ he said, referring to non-market capitalisation indices. ‘But we need to look at the evidence to ask when it works and why, and then ask how it would be put into portfolios.’

Dominic Lobo (pictured), director of Stanmore-based The Quadrant Group, said he was studying smarter indices and their methodology, but would reserve judgment pending completion of this.

For the full article read: ‘Advisers pass on giving smarter beta an A-grade’ published on 3rd February 2014 by David Sandham.

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