Smart beta rising


The smart beta investing wave continues to gather more energy.

Investors steered $24 billion into funds adopting smart beta strategies in the first quarter, according to the Financial Times.

That’s up from $1 billion from the year-ago period.

 

smart beta

 

Big Numbers

Smart beta investment strategies are one of the most powerful trends in investing with assets under management now topping $500 billion.

Financial firms such as BlackRock, Legg Mason, Franklin Templeton and Amundi have rushed to launch smart-beta funds in response to growing demand.

So has Covestor, which launched the Smart Beta portfolios.  We believe that our smart beta portfolios potentially offer investors enhanced returns and competitive fees.

 

Covestor Edge

Covestor’s Smart Beta portfolios are carefully constructed baskets that rank stocks by traits other than their market value, the standard methodology employed by traditional benchmarks, such as the Standard & Poor’s 500.

Here are some other advantages worth considering:

Low Cost: With an 8 basis point management fee, Covestor Smart Beta portfolios are competitive with existing products in the marketplace.

Low Minimums: Portfolios have low investment minimums of just $5,000 through use of fractional shares.

Factor Tilts: These portfolios are designed for exposure to desirable stock characteristics, or factors, such as robust growth, valuation, quality, and dividends that have been back tested. Portfolios are also well diversified across sectors.

Rules-Based: The Covestor Smart Beta portfolios have filters to screen out undesirable stocks and a repeatable rules-based framework to determine position allocations.

Auto-Rebalancing: Portfolios are rebalanced quarterly; stocks sold are replaced by new ones with more attractive characteristics.

Transparency: Investors have immediate, online access to information on holdings, trades and performance.

Interested in finding out more? You can learn more about Covestor, or try our services with a free trial account.

Photo Credit: Pictures of Money via Flickr Creative Commons

Disclaimer: Covestor’s Smart Beta Portfolios are not Exchange-Traded Funds or mutual funds but are portfolios made up of individual stock holdings. These portfolios mainly invest in stocks and may not be suitable for all investors. You may lose all or part of investments in these portfolios, and their past performance is no guarantee of future results. You may find additional information on the risks, conflicts of interest, applicable brokerage commissions, fractional shares, and limitations on investments and divestments associated with these portfolios (along with Covestor’s full disclosures) on the Forms and Agreements page at ibkram.com. Covestor Ltd. is an investment advisor registered with the Securities and Exchange Commission (“SEC”). Registration does not imply a certain level of skill or training. Brokerage services are provided to Covestor clients by Interactive Brokers LLC, an SEC-registered broker-dealer and member NYSE/FINRA/SIPC and a Covestor affiliate.       

Author profile

IB Asset Management
IB Asset Management
IB Asset Management is a pioneer in online investing. IB Asset Management offers a variety of portfolios, including the Smart Beta portfolios, which are managed by IB Asset Management's Chief Investment Officer and Investment Management team. The “Smart Beta” approach to portfolio construction is grounded in academic research. The goal is to achieve an alternative risk-return profile which is more attractive than a simple capitalization-weighted index such as the S&P 500. IB Asset Management Smart Beta portfolios are designed to provide systematic exposure to a fundamental factor or combination of factors. Portfolios are constructed using a rules-based approach and offered at a relatively low cost.