AUCKLAND, NEW ZEALAND / ACCESSWIRE / October 4, 2017 / When it comes to investing in the modern market, many people are moving away from traditional capitalization-based approaches to alternative tactics. One such method – smart beta, also known as advanced beta or alternative beta – has already gained popularity in Europe and North America. Sentinel 1973 talks about how Asian investors are now turning to smart beta strategies to meet performance standards and increase returns.
Smart beta is a passive investment method that tracks stocks by taking advantage of alternative factors like dividend payouts, volatility, and other inefficiencies in the market rather than the traditional approach of tracking market capitalization; this allows to search for stocks that are low in cost but offer better earnings in an uncertain economic climate. Interest in smart beta was fueled by the 2007-2008 global financial crisis which prompted focus to shift to controlling risks, not only maximizing profit. Since then, it has evolved to cover equities, commodities, and fixed income investments. The unique strategy is becoming a favored choice with Asian portfolios as it has a higher trading cost and delivers a more astute return and risk trade-off compared to conventional methods. This can be attributed to the inactive management efforts and lack of day-to-day decision making necessary for feasible transactions, which saves on costs.
According to a survey released by FTSE Russell, Asia Pacific investors who have adopted smart beta jumped from 38% to 48% within the course of a year. Among the people who were polled, seven out of ten of them considered a smart beta index an appropriate basis to identify prosperous stocks, and one out of two polled had plans to increase smart beta allocations. The Managing Director of Research at FTSE Russell, Rolf Agather, stated that “the trend observed over the past three years of increasing global growth and adoption of smart beta indexes continue(d) in 2017” and that it was “clearly not a fad, but now widely recognized as a meaningful set of new tools.” Sentinel 1973 agrees as the numbers indicate: global assets invested in smart beta exchange traded funds rose to a record $560 billion USD in February of 2017 with estimates that it would reach $1 trillion USD by 2020. Though it’s on the right path, Asia still has a long way to catch up as nearly 90% of the smart beta assets reported by independent research and consultancy firm ETFGI were listed in the United States.
For nearly twenty years Sentinel 1973 has been the leading broker market for CFDs. The award-winning company specializes in trading financial products in Over the Counter (OTC) and organized stock markets, in addition to offering CFDs on currencies, indexes, and commodities. The professional finance team provides advanced technological solutions with 10 trading platforms and over 200 financial instruments for their retail and institutional clients to utilize. Their customers are based in 180 countries across the Middle East, Asia, Africa, Europe, and Latin America.
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SOURCE: Sentinel 1973
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