The percentage of global institutional investors reporting an existing smart beta index allocation has reached a new peak of 46 per cent, up from 36 per cent last year, according to a new report by FTSE Russell.
The global index and data provider’s report also indicates the increasing global growth and adoption of smart beta is continuing in 2017. However, adoption is still greater in Europe than in North America and Asia Pacific.
The largest rise in smart beta adoption this year is among institutional investors with between $1 billion and $10 billion assets under management. This contrasts with last year when the largest rise in adoption was among investors with less than $1 billion.
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“Our fourth annual smart beta survey demonstrates asset owners have readily adopted smart beta indexes and continue to evolve their strategies based on these indexes,” said Rolf Agather, managing director of North America research at FTSE Russell, in a news release.
“. . . The survey results suggest that growth in smart beta is likely to continue at a robust pace. Responses indicate that adoption expectations of asset owners currently evaluating initial or additional smart beta index allocations remains strong and satisfaction with smart beta among current users remains high. We believe the survey findings can provide a degree of insight for all market participants with an interest in smart beta.”
Interest in smart sustainability index-based strategies is greatest among institutional investors with assets under management greater than $10 billion, according to the research, which notes that regional differences continue to persist. Within this size tier, nearly 80 per cent of investors domiciled in Europe anticipate applying environmental, social and governance considerations to a smart beta strategy, while just 30 per cent domiciled in North America do.
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