Smart beta is an investing strategy that combines the benefits of passive investing and the advantages of active strategies. Therefore, the term ‘Smart Beta’ stems from a combination of traditional passive indexing (Beta) with active, rule-based stock selection strategies (Smart) – with a goal to beat standard market performance.
The Smart Beta Portfolios are proprietary investment portfolios designed and managed by Interactive Advisors. The investment objective of each Smart Beta Portfolio is to achieve total returns that exceed the total returns of certain market capitalization weighted indices, such as the S&P 500. In order to do this, they focus on systematic rules-based investment strategies that do not use conventional market capitalization weights. Instead, the portfolios make use of alternative weighting schemes based on measures such as value, growth, quality, and dividend yield.
The Smart Beta Portfolios invest in a large number of stocks with the goal of achieving an alternative risk-return profile which is more attractive than a simple capitalization-weighted index such as the S&P 500. They can work for disciplined and patient investors who prefer systematic approaches, and have a long-term horizon.
Here are some of the advantages of Smart Beta investing to start with:
- Low costs
- Low minimums
- Factor tilts
- Rules-based
- Transparent
- Auto rebalancing
To further understand these and other aspects of our Smart Beta offerings, read the Smart Beta whitepaper here.
To view our range of Smart Beta portfolios as managed by our Chief Investment Officer and Investment Management team, take a look here.
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DISCLOSURES:
These portfolios mainly invest in stocks and may not be suitable for all investors.
Past performance is no guarantee of future results. Be aware that you can lose all or part of your investments in these portfolios.
You can find additional information on the risks, conflicts of interest, applicable brokerage commissions, fractional shares, and limitations on investments and divestments associated with these portfolios (along with Interactive Advisors full disclosures) on the Forms and agreements page.
Covestor Ltd, also known and doing business as Interactive Advisors, is an Interactive Brokers Group Company. It is an investment advisor registered with and regulated by the Securities and Exchange Commission under the Investment Advisers Act of 1940. Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC. Interactive Advisors is not registered in any jurisdiction outside the United States. This website is for informational purposes only and is not intended to be a solicitation or advertisement in any jurisdiction other than the United States. See important Terms of Use and our Privacy Policy Notice on our Forms and Agreements page.
Nothing in this article should be construed as a solicitation or offer or recommendation to buy or sell any security or as an attempt to provide any investment advice. Investment advice is only provided to investors who become clients pursuant to an investment management agreement. The content of this page is offered for informational purposes only, does not constitute investment advice, and is not an offer to buy or sell any security or invest in any of our portfolios.
Past performance is no guarantee of future results, nor is it indicative of future performance. All investments in financial markets involve risk, including the risk of loss, such as a loss of principal and reduction in earnings.
