Smart Beta

History is Repeating Itself with Trends in Smart Beta

(or, Why the Quality Factor Will Disappoint Investors) In this article in HFMweek, Beachhead’s managing member, Andrew Beer, talks about the quality factor and concludes that, rather than reflect a new risk premium, it is more likely the statistical validation of a long-term convergence of growth and value investment strategies.  As a result, returns going forward are likely to disappoint investors. HFMweek subscribers click here to access this article, or contact us for additional information.

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The alternative alternative ETF

In a recent interview in Wealth Adviser, Andrew Beer describes in detail how Beachhead Capital’s Dynamic Beta Strategy differs from smart beta ETFs and explains why the strategy is a viable option for institutional investors and consultants in search of an “alternative” alternative allocation for their portfolios. “In 2012 we thought there was an opportunity for US high net worth investors who are sensitive to tax issues to create a product using long ETFs. We wanted to create a product that could match or outperform their long/short hedge fund portfolio but only in long ETFs,” Beer explains. “We have found …

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How Smart is Smart Beta?

If smart beta is smart, is my beta dumb? First, a definition:  smart beta strategies are (allegedly) better ways of getting exposure to equities, bonds and other asset classes than via traditional indices.  What precisely does this mean? Let’s assume my core equity allocation is an S&P 500 index fund.  Smart beta guys think I have a problem:  the index is weighted by market cap.  Whenever Standard & Poor’s rebalances it, the weights of winners go up and losers down.  In other words, after Google rose 45% in 2015, I buy more Google (ok, “Alphabet”); as Chesapeake Energy dropped 75% …

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