According to a recent FTSE Russell survey, UK financial advisors are aware of smart beta index-based strategies and are increasing their use, yet remain somewhat skeptical of their benefits and are looking for a greater understanding.
The 2018 FTSE Russell smart beta advisor survey expanded on the global index provider’s 2015 US advisor smart beta survey with input from 256 full-time, fee-based financial advisors and wealth managers divided almost equally between the US, UK and Canada, with 83 of those advisors based in the UK.
Survey findings showed that, among UK financial advisors, more than seven in ten (72%) are “aware” of smart beta, yet in this same group just one in three (34%) are “very familiar” with smart beta approaches.
And while more than half of UK advisors surveyed (52%) expect their use of smart beta strategies to increase in the next year or two, survey responses indicate a need for more information on smart beta. Specifically, among UK advisors who do not use smart beta strategies, top reasons cited were “not possible to predict whether these strategies will outperform conventional active or passive funds” (35%); “not a long enough track record” (32%); “you can achieve smart beta objectives with your own portfolio management”; and “don't feel that back testing shows these strategies offer enough” (26% each).
Source: FTSE Russell. Smart beta: 2018 survey findings from US, Canadian and UK financial advisors.
Andre Voinea, senior account director, FTSE Russell:
“Our survey findings reinforce the fact that we have seen very strong and growing interest in smart beta strategies among UK-based financial advisors, but we clearly have further to go. We continue to see a need among our clients for more education, information and insight around the value of smart beta strategies and how they may play a role in client portfolios.”
Get information on smart beta indexes from FTSE Russell.
© 2018 London Stock Exchange Group plc and its applicable group undertakings (the “LSE Group”). The LSE Group includes (1) FTSE International Limited (“FTSE”), (2) Frank Russell Company (“Russell”), (3) FTSE TMX Global Debt Capital Markets Inc. and FTSE TMX Global Debt Capital Markets Limited (together, “FTSE TMX”) and (4) MTSNext Limited (“MTSNext”). All rights reserved.
FTSE Russell® is a trading name of FTSE, Russell, FTSE TMX and MTS Next Limited. “FTSE®”, “Russell®”, “FTSE Russell®” “MTS®”, “FTSE TMX®”, “FTSE4Good®” and “ICB®” and all other trademarks and service marks used herein (whether registered or unregistered) are trade marks and/or service marks owned or licensed by the applicable member of the LSE Group or their respective licensors and are owned, or used under licence, by FTSE, Russell, MTSNext, or FTSE TMX.
All information is provided for information purposes only. Every effort is made to ensure that all information given in this publication is accurate, but no responsibility or liability can be accepted by any member of the LSE Group nor their respective directors, officers, employees, partners or licensors for any errors or for any loss from use of this publication or any of the information or data contained herein.
Views expressed by Andre Voinea are as of February 5 and subject to change. These views do not necessarily reflect the opinion of FTSE Russell or the LSE Group.
No member of the LSE Group nor their respective directors, officers, employees, partners or licensors make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE Russell Indexes or the fitness or suitability of the indexes for any particular purpose to which they might be put.
No member of the LSE Group nor their respective directors, officers, employees, partners or licensors provide investment advice and nothing in this IDEA should be taken as constituting financial or investment advice. No member of the LSE Group nor their respective directors, officers, employees, partners or licensors make any representation regarding the advisability of investing in any asset. A decision to invest in any such asset should not be made in reliance on any information herein. Indexes cannot be invested in directly. Inclusion of an asset in an index is not a recommendation to buy, sell or hold that asset. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.
No part of this information may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the applicable member of the LSE Group. Use and distribution of the LSE Group index data and the use of their data to create financial products require a licence from FTSE, Russell, FTSE TMX, MTSNext and/or their respective licensors.
Past performance is no guarantee of future results. Charts and graphs are provided for illustrative purposes only. Index returns shown may not represent the results of the actual trading of investable assets.