News

Law

Asset Management

Investment Banking

Wealth

Hedge Funds

People

Newsletters

Events

Lists

Warning on smart beta: 'If it isn't simple, walk away'

Pioneers in fast-growing sector say some products too complex and opaque

Three pioneers in the fast-growing field of smart beta have warned of complicated, expensive and opaque imitation smart beta strategies that could lead to heavy losses for investors and damage the sector’s reputation.

The alarm comes from consultant Towers Watson, which first recommended smart beta strategies in 2000, fundamental indexation pioneer Research Affiliates, which followed in 2002, and Russell Investments, a major provider of smart beta indices.

WSJ Logo