Assets replicating Scientific Beta's multi-factor indices reach USD46bn
Assets tracking Scientific Beta’s smart beta indices reached USD48 billion at 30 June, 2019, an increase of USD14 billion or 40 per cent year-on-year growth.
Noël Amenc, CEO of Scientific Beta, says: “In a challenging market environment for factor strategies, we have been very heartened by the continued growth of Scientific Beta's assets under replication. We think that our success is based on transparency on explicit and implicit risks and the capacity to manage these risks using the risk-control options that are offered for all of our flagship multi-beta multi-strategy indices.”
Scientific Beta's indices are based on an investment philosophy that is motivated by a search for robustness at all stages of the index design process and is guided by the following three key principles:
• Offering exposure to long-term well-rewarded risk factors, the existence and persistence of which have been documented by empirical studies and economic rationale;
• Ensuring a good reward for these factors through diversification of unrewarded (specific) risk, to improve long-term risk-adjusted performance while reducing short- and medium-term risk;
• Sound risk management by implementing risk allocation between smart factor indices and risk-control options. The risk-control options offered by Scientific Beta also make it possible to respond to important fiduciary choices for investors or their asset managers, such as whether or not to respect sector neutrality, country neutrality or to use a market beta adjustment, which allows the market beta of the multi-factor strategy to be aligned with that of the market.