West Loop Financial LLCInside The ‘Smart Beta’ Hype – West Loop Financial LLC https://www.westloopfinancial.com Evolutionize Site Wed, 19 Aug 2020 20:50:49 +0000 en-US hourly 1 https://wordpress.org/?v=5.1.22 Inside The ‘Smart Beta’ Hype https://www.westloopfinancial.com/2015/02/23/inside-smart-beta-hype/ https://www.westloopfinancial.com/2015/02/23/inside-smart-beta-hype/#respond Mon, 23 Feb 2015 09:00:47 +0000 http://evolvemypractice.com/?p=1729 While Wall Street investment firms have done a very poor job of delivering good risk-adjusted returns to investors, their well-tuned marketing machines have done a great job creating demand for products where none should really exist. Their latest creation is a type of investment offering referred to as “smart beta.” To ensure you understand why...

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]]> While Wall Street investment firms have done a very poor job of delivering good risk-adjusted returns to investors, their well-tuned marketing machines have done a great job creating demand for products where none should really exist. Their latest creation is a type of investment offering referred to as “smart beta.”

To ensure you understand why most of what is called “smart beta” is really nothing more than a marketing gimmick, we’ll begin with a definition of beta and a brief history of asset pricing models; namely, models that explain the sources of returns of diversified portfolios.

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