Appetite for smart beta strategies grows
By Andrew Pierce
Investor momentum for smart-beta exposure continues to gather pace, with TOBAM, the Paris-based asset manager spun out of Lehman Brothers Asset Management, pulling in more than $2 billion of assets in just three months.
The company, which has been running its smart-beta Anti-Benchmark strategy since 2006, has had $2.1 billion of inflows for the offerings since December 1, 2014. Since the start of 2014, there has been a 56% increase in the firm’s smart-beta assets under management, bringing total assets to $8.7 billion.
Tobam said in a statement that interest has come from institutional investors based in Europe, North America, Asia and, most recently, the Middle East. It added that 14 of its 16 smart-beta strategies had outperformed their benchmarks during 2014.
Smart-beta strategies – which rank holdings by factors such as momentum or volatility as opposed to market capitalisation – have gained increasing traction among investors. Fund managers such as BlackRock and Lyxor Asset Management have bolstered their smart beta ranges in recent weeks.
Last month, consultancy Towers Watson – a major proponent of the “smart-beta” concept in the past decade – said it had allocated $8 billion to the products in 2014, bringing its clients’ total exposure to $40 billion worldwide.
In January, the consultancy PwC described smart-beta funds as a “hotbed” of product development activity.