Towers Watson’s institutional investor clients made more than twice as many new investments in smart beta strategies during 2013.
According to the company’s data, investments in smart beta were approximately US$11 billion ($12.2 billion) across more than 180 portfolios, compared with about US$5 billion ($5.5 billion) across almost 130 portfolios the year before.
Towers Watson’s clients globally have now allocated more than US$32 billion ($35.4 billion) to smart beta strategies to almost 500 portfolios, across a range of asset classes.
“It is no surprise that smart beta strategies are being implemented at this rate, given their inherent relevance for most institutional investors,” says Craig Baker, global head of investment research at Towers Watson.
“Interestingly, it has taken some time to get to this point, given that we started developing the concept in 2000 as part of our work on structured alpha, then in more detail in 2002, as beta prime,” he adds. “While it’s satisfying that our clients have been able to benefit first from a range of smart beta strategies, we are somewhat concerned about the proliferation of products now on the market that claim to be smart beta, particularly in the equity area.”
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