Smart Beta Argument Gains Nuance As Narrative Continues

When the smart beta argument was first launched into general discussion, some alternative investment practitioners and academics took issue with the concept. After all “beta” was considered returns attributed towards the general force of the market (e.g.: S&P 500 index relative to individual stocks), where as alpha was considered individual manager ability to deliver returns either noncorrelated to the general market or, the more traditional definition, the ability to “beat” the stock market. When the concept was introduced, certain hedge fund managers raised concerns that new products were being created that would ultimately compete with their traditional “alpha-based” products. Impressively, the concept gained strength