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Beyond Smart Beta. Index Investment Strategies for Active Portfolio Management. The Wiley Finance Series

  • ID: 3927644
  • Book
  • May 2017
  • 240 Pages
  • John Wiley and Sons Ltd
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Discover Higher Returns by Indexing with Exchange–Traded Products

Beyond Smart Beta is the definitive guide to using index investing to enhance your active portfolio management. An author team recognized as thought–leaders and accomplished practitioners in the industry explores the full selection of exchange–traded products (ETPs). They discuss the risks and paybacks related to a variety of indexing approaches and share insightful views on next–generation methods evolving in the marketplace. Dozens of charts and tables offer visual examples of the concepts covered throughout, all of which aim to give you a firmer grasp on the mechanics and practices behind ETP. Numerous practical examples give special attention to some critical facts about indexes that even seasoned traders and investors overlook. Balance your portfolios for future gains by:

  • Acquiring expert–level knowledge of ETP handling, costs, trading and investment
  • Skilfully assessing today′s ETP landscape and avoiding costly pitfalls while mitigating risk
  • Immediately boosting your investment strategy and weatherproofing your portfolios

Beyond Smart Beta shows active investors how to maximize returns with passive products.

"A very timely book that will help demystify the often misunderstood world of smart beta."
Michael John Lytle, original co–founder of Source ETF; currently an independent business strategist in London, UK

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Preface vii

Acknowledgments ix

About the Authors xi

CHAPTER 1 The Beauty of Simplicity The Rise of Passive Investments 1

Outperformance A Tough Challenge 1

Institutional Investors: A Small Change in Allocations, A Big Step for Passive Investments 2

Not All Big Guys Love ETFs 3

CHAPTER 2 The History of Indexing and Exchange–Traded Products 6

Frequent Pricing Thanks to Copper and Feather 6

Journalist Trio Pictures the Market 7

Indexation Across the Globe 7

Customized Indexing aka Smart Beta 8

Exchange–Traded Funds A Unique All–rounder 15

Exchange–Traded Commodities Heavy Metal Even for Lightweight Investors 46

Exchange–Traded Notes The Underdog 53

CHAPTER 3 Index Evolution 57

Benchmark Indices 58

Smart Beta Indices (Second Generation of Indexing) 85

Next Generation Indices (Third Generation of Indexing) 104

CHAPTER 4 The Good, Bad and Ugly A Critical Review of Today s Indexing Approaches 127

Synthetic vs. Physical Replication 128

Second Generation Indexing Critique The Bad Ones 129

Commodity/Energy/Oil ETP Products 133

Volatility ETPs 135

CHAPTER 5 Advantages Unlimited Portfolio Application Strategies for Superior Index Investing 139

Never Underestimate the Importance of Investment Costs 139

Smart Beta Deconstruction 144

Conclusion 152

Mind the Behavioral Gap Earning More by Avoiding Investing Errors 152

The Next Generation of Asset Allocation Risk Factor Allocation Approach in Portfolio Construction 155

The Ultimate Question: Passive or Active? 163

CHAPTER 6 Unchaining Innovation The Future of Active Investing in Passive Products 166

Alternative Investing 166

Environmental, Social and Governance (ESG)–Based Investments 180

Conclusion 190

Customized Indexing 192

Glossary 200

References 210

Index 215

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Gökhan Kula
Martin Raab
Sebastian Stahn
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