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Komfie Manalo, Opalesque Asia: Understanding traditional beta, smart beta, alternative beta, and alpha would ensure that clients are paying the right fees for their alternative beta and alpha exposures, said Heath Davies, global head of hedge fund research at HSBC Alternative Investments Limited (Hail), during the latest Opalesque 2016 U.K. Roundtable.
He told participants of the Roundtable, "HSBC also has a smart beta capability. So for us, it’s really about understanding the continuum of traditional beta, smart beta, alternative beta, and alpha, and ensuring that clients are paying the right fees for their alternative beta and alpha exposures."
In terms of innovation, Davies said that HSBC is looking at smart beta and alternative beta, and trying to understand on a forward-looking basis how that could evolve, bearing in mind that the company needs to continue delivering value for money to its clients in risk-off and risk-on environments.
Davies continued, "On fees we believe investors should pay basis points for beta, and something more meaningful if managers deliver true alpha. The question for alpha is what would the correct level of those fees be, given the manager’s current AUM, and the remaining available capacity."
But what is the difference between a smart beta and an alternative beta?
Davies explained that a smart beta is a concept that comes more from the long...................... To view our full article Click here
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