He used to say “Diversification is the only free lunch”.
In 2005, TOBAM was one of the two first inventors of smart beta, exploiting the full breadth of independant risk drivers available in any given investment universe and neglected by conventional beta.
This before the “smart beta” expression was even introduced and subsequently somewhat abused by the industry.
Smart beta at its origins goes back to the idea of delivering a better or smarter market premium, since market cap-weighted indices are arguably very biased dynamic risk allocators and hence not representative of the true market diversity.
TOBAM’s founder Yves Choueifaty gave an interview in 2015, where he made this point very clear saying: “what defines truly a smart beta approach should be its capacity to deliver an equilibrium portfolio”.
An equilibrium portfolio being a portfolio that is non circular-referring, nor diverging if used to generate implied returns.