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Laxman Pai, Opalesque Asia: Global smart beta adoption rates have reached a record high of 58% in 2019, 10% higher than 2018.
Notably, in 2019 nearly eight in 10 (78%) asset owners have implemented, are evaluating or plan to evaluate a smart beta index-based strategy, according to FTSE Russell's annual global institutional asset owner smart beta survey.
In addition, adoption rates increased in Europe, North America and the Asia Pacific region, with growth also recorded in all AUM tiers: less than $1bn, between $1-10bn and more than $10bn.
European asset owners maintain the highest rate of smart beta adoption, with 65% of survey respondents in Europe reporting an existing allocation to smart beta. North American asset owners are now not far behind, with 60% reporting an existing allocation in 2019, an 18% rise since [2018].
The survey shows that asset owners are becoming increasingly comfortable with smart-beta strategies and there is less uncertainty about their longer-term track records. Respondents are also viewing smart-beta allocation strategies as more similar to traditional active rather than passive strategies.
The number of institutions adopting smart beta for cost savings objectives has more than doubled between 2014 (15%) and 2019 (31%).
Multi-factor index-based strategies continue to drive adoption rates, with users of the strategy increasing from 49% in 2018 to 71% in 2019.
Uptake has more than tripled since 2015 and h...................... To view our full article Click here
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