Deutsche Asset & Wealth Management (Deutsche AWM) has listed a range of strategic beta ETFs on the London Stock Exchange that provide investors with equity factor exposure…..
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Martin Weithofer, head of strategic beta
The new ETFs, which debuted on the Deutsche Börse on September 23rd, provide exposure to the following equity factors: value, quality, momentum and low beta. The ETFs are physical replication funds and provide a long-only tilt towards their equity factor, with stocks selected on a global basis.
Strategic beta – also commonly termed ‘smart beta’ – is an approach to investment that involves breaking down market risk and return into a number of component parts, or factors, with strategies put in place to take exposure to those factors. The approach has gained credence as a strategic beta strategy post the credit crunch, when many investors found that portfolios established on a geographic and asset class basis were notably more correlated at a time of crisis than had been expected. This led some large pension funds, seeking reliable diversification, to fundamentally change the nature of their asset portfolios in order to invest using a risk factor-based approach1. Analysis also suggests that certain individual factor exposures, and portfolios of factor exposures, may provide better risk-adjusted performance in the long term compared with traditional ‘core beta’2.
Martin Weithofer, head of strategic beta, commented: “Factor-based investing is moving from being a niche investment practice into the mainstream, and the launch of our strategic beta ETFs puts us in a strong position to meet this growing demand.”
Source: ETFWorld.co.uk
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