Beyond Smart Beta

Delve into ETFs for smarter investing and a weatherproof portfolio Beyond Smart Beta is the investor's complete guide to index investing, with deep analysis, expert clarification and smart strategies for active portfolio management. From the general to the obscure, this book digs into every aspect of Exchange Traded Funds (ETFs) including ETCs and ETNs to break down the jargon and provide accessible guidance on utilising the indices as part of a more productive investment strategy. Succinct explanations of terms and concepts help you better grasp ETP anatomy, mechanics and practices, while examples, charts and graphs provide quick visual reference for total understanding. The expert author team examines the risks and benefits associated with various indexing approaches, sharing critical review of next-generation methods to help you make well-informed investment decisions. ETFs provide a solid foundation within mature and well-researched markets, allowing investors to focus on areas where active management has the potential to reap higher returns. This book shows you how to take full advantage of the growth of this market to strengthen your portfolio for the long term. Assess the current landscape and the anatomy of ETFs/ETPs Understand ETP handling, costs, trading, and investment Evaluate the pros and cons of next-generation indexing approaches Avoid risk while incorporating indices into an active portfolio management strategy Index concepts have evolved from basic, passive investments through Smart Beta, and are evolving into a third generation of products that will quickly become an important element of investor portfolios. Key benefits have propelled ETFs to surpass hedge funds in global capital, and the growth shows no sign of slowing. Beyond Smart Beta provides a primer for investors seeking to understand and take advantage of these lucrative new products.

Delve into ETFs for smarter investing and a weatherproof portfolioBeyond Smart Beta is the investor's complete guide to index investing, with deep analysis, expert clarification and smart strategies for active portfolio management. From the general to the obscure, this book digs into every aspect of Exchange Traded Funds (ETFs) including ETCs and ETNs to break down the jargon and provide accessible guidance on utilising the indices as part of a more productive investment strategy. Succinct explanations of terms and concepts help you better grasp ETP anatomy, mechanics and practices, while examples, charts and graphs provide quick visual reference for total understanding. The expert author team examines the risks and benefits associated with various indexing approaches, sharing critical review of next-generation methods to help you make well-informed investment decisions.ETFs provide a solid foundation within mature and well-researched markets, allowing investors to focus on areas where active management has the potential to reap higher returns. This book shows you how to take full advantage of the growth of this market to strengthen your portfolio for the long term.* Assess the current landscape and the anatomy of ETFs/ETPs* Understand ETP handling, costs, trading, and investment* Evaluate the pros and cons of next-generation indexing approaches* Avoid risk while incorporating indices into an active portfolio management strategyIndex concepts have evolved from basic, passive investments through Smart Beta, and are evolving into a third generation of products that will quickly become an important element of investor portfolios. Key benefits have propelled ETFs to surpass hedge funds in global capital, and the growth shows no sign of slowing. Beyond Smart Beta provides a primer for investors seeking to understand -- and take advantage of -- these lucrative new products.

Preface viiAcknowledgments ixAbout the Authors xiChapter 1 The Beauty of Simplicity - The Rise of Passive Investments 1Outperformance - A Tough Challenge 1Institutional Investors: A Small Change in Allocations, A Big Step for Passive Investments 2Not All "Big Guys" Love ETFs 3Chapter 2 The History of Indexing and Exchange-Traded Products 6Frequent Pricing Thanks to Copper and Feather 6Journalist Trio Pictures the Market 7Indexation Across the Globe 7Customized Indexing aka Smart Beta 8Exchange-Traded Funds - A Unique All-rounder 15Exchange-Traded Commodities - Heavy Metal Even for Lightweight Investors 46Exchange-Traded Notes - The Underdog 53Chapter 3 Index Evolution 57Benchmark Indices 58Smart Beta Indices (Second Generation of Indexing) 85Next Generation Indices (Third Generation of Indexing) 104Chapter 4 The Good, Bad and Ugly - A Critical Review of Today's Indexing Approaches 127Synthetic vs. Physical Replication 128Second Generation Indexing Critique - The Bad Ones 129Commodity/Energy/Oil ETP Products 133Volatility ETPs 135Chapter 5 Advantages Unlimited - Portfolio Application Strategies for Superior Index Investing 139Never Underestimate the Importance of Investment Costs 139Smart Beta Deconstruction 144Conclusion 152Mind the Behavioral Gap - Earning More by Avoiding Investing Errors 152The Next Generation of Asset Allocation - Risk Factor Allocation Approach in Portfolio Construction 155The Ultimate Question: Passive or Active? 163Chapter 6 Unchaining Innovation - The Future of Active Investing in Passive Products 166Alternative Investing 166Environmental, Social and Governance (ESG)-Based Investments 180Conclusion 190Customized Indexing 192Glossary 200References 210Index 215