| In early December, trustees of the $51.4 billion Alaska Permanent Fund Corp (APFC) gathered in a fifteenth floor conference room at the Sheraton Anchorage Hotel. Through the expansive windows, staff, advisors and consultants had a stunning view: Alaska’s most populous city was spread out below them, with mountains looming majestically in the distance.
Their focus that day, though, was not snow-capped peaks. One key item for APFC CIO Jay Willoughby: smart beta. The strategy, whose very definition is widely debated by academics and industry practitioners, strives to outperform traditional capitalization-weighted indexes, like the Standard & Poor’s 500 Index of U.S. stocks, by tilting portfolios to emphasize securities that have specific characteristics, "risk factors" in Wall Street argot, that make them more likely to generate long-term superior performance — or else display lower volatility...............................................Full Article: Source |