A Global Guide to Strategic-Beta ETPs

Advisers and institutional investors will benefit from Morningstar's new strategic beta ETF classification system

Morningstar ETF Analysts 29 September, 2014 | 9:00AM
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"Smart beta," "alternative beta," "enhanced indexes," "quantamental indexes"—at this point, the list of monikers describing the fast-growing middle of the active-to-passive spectrum extends long enough to put it just a few syllables shy of making a lunar landing. It’s an arena that has further blurred the lines between active and passive management, and one that is at the leading edge of the most recent wave of product proliferation within the global exchange-traded products landscape.

What Morningstar deems strategic beta is a broad and rapidly growing category of benchmarks and the investment products that track it. The common thread among them is that they seek to either improve their return profile or alter their risk profile relative to more-traditional market benchmarks.

In the case of equity products, which account for the overwhelming majority of assets in this arena, the result is typically one or more factor tilts relative to standard market indexes.

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Morningstar ETF Analysts  research hundreds of ETFs available to European investors. The Morningstar Rating for ETFs is based on a risk-adjusted performance measure

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