Smart Beta AUM Doubles In Three Years To $1trn
Roughly $1trn now sits in systematic factor strategies, $700bn of which is run by asset managers, according to the latest estimate from the MJ Hudson Allenbridge Systematic Factor Market Review.
A follow-up to the group's 2014 report, which indicated global assest under management (AUM) of approximately $500bn, this year's survey revealed that almost two-thirds of asset managers and half of investment banks witnessed asset growth of more than 100% over the three-year period.
The $1trn figure represents more than 2,200 strategies, with 615 being managed by asset managers and the rest by investment banks.
More than half (385) of those looked after by asset managers are equity-based, though multi-asset strategies have also become a more popular feature of new product development.
The survey also found most strategies are smart beta - or long-only - but the number of alternative beta - or long/short strategies - is increasing.
Asset managers were found to concentrate in a smaller number of flagship strategies and average management fees were priced at around 0.47%. However, management fees were higher for long/short alternative beta strategies, on average, with asset managers charging 0.77%.
Odi Lahav, CEO of MJ Hudson Allenbridge, said: "Given the increasingly complex and diverse nature of the marketplace and the fact that live track records in this sector are very limited, it is important that expert advice is taken by any investors looking to access these strategies.
"While the promise of lower fees and strong returns may appeal, selecting the right strategies - and the right providers - for an investor's specific requirements is no easy feat."
EDHEC: 94% of investors plan to up smart-betaexposure
Antti Suhonen, one of the authors of the report and a director at MJ Hudson Allenbridge, added: "Our 2017 Market Review provides a comprehensive overview of the factor strategy market, reflecting our commitment to this area and our coverage of the product universe."
The MJ Hudson Allenbridge Systematic Factor Market Review surveys smart and alternative beta strategies for institutional investors. It explains the development of these strategies over time, positing the reasons for growth in popularity and providing detailed estimates of the size and scope of today's market.
The 2017 survey involved face-to-face meetings, supported by an online questionnaire. Twenty-one asset managers and 11 investment banks participated, collectively managing 2,213 systematic factor strategies across the market.
Gyrostat September Retirement Portfolio Resilience Assessment
September Retirement Portfolio Resilience Assessment Markets have fallen. The price of risk has risen. ... Read more
Does The West Have A Problem With Government Bonds
If you have been following the financial pages over the past few weeks, one theme has begun to stand out from the usual ... Read more
August Retirement Portfolio Resilience Assessment
Markets Are Higher. The Price of Risk Is Lower. Retirement invest... Read more
When The Wave Turns
Why Retirement Investing Is Moving Towards Resilience Jeremy Grantham’s latest market warnings have revived an old tru... Read more
Gyrostat Capital Management: July Retirement Portfolio Resilience Assessment
The Market Is Currently Presenting an Opportunity to Strengthen Retirement Portfolio Resilienc... Read more
The Invisible Risk That Decides Your Retirement
Why how investors behave matters more than what markets do and what disciplined port... Read more