Smart Beta investors looking to ‘mix and match’
Investors using smart beta strategies have moved from using single strategies to using a number of strategies according to AXA IM which has launched a number of products utilizing multiple strategies and factors.
AXA IM, Director for Australia and New Zealand, Craig Hurt said the growing popularity and use of smart beta investments, which use passive investments overlaid with certain risk premia, has seen investors starting to blend them within portfolios.
"The smart beta conversation has evolved from investors considering strategies that just focus on one risk premia to a blended, more sophisticated risk management approach," Hurt said.
"When smart beta approaches are considered in a risk factor analysis framework, investors are exposed to a more diversified set of risk factors and can better control their risk and harvest a wider range of risk premia."
"The patterns of active returns for each smart beta strategy in the short term are generally imperfectly correlated and this means that smart beta strategies can be combined to target a desired risk and return outcome in a more diversified and targeted manner."
As a result of this interest AXA IM has launched a series of blended SmartBeta equity strategies focusing on risk premia such as value and momentum.
AUTHOR
Jason Spits
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