Skip to Content

Active Management 2.0

The popularity of strategic-beta strategies risks dooming these funds to underperformance.

Christopher Davis

Jun 16, 2016

This analyst blog is part of our coverage of the 2016 Morningstar Investment Conference.

Traditional active managers have found conventional market-cap weighted benchmarks like the S&P 500 Index formidable foes. A new wave of so-called "strategic-beta" or "smart-beta" strategies promise better outcomes. These funds track rules-based indexes that overweight stocks based on investment factors such as valuation, size, momentum, profitability, and volatility, which academic research has tied to superior risk-adjusted returns. Whether these market inefficiencies will persist--and whether investor can take advantage of them--were the central questions considered at a Morningstar Investment Conference panel on strategic beta.

SnoHcI GYdvrxe peQoL eh iw inAUZkE J DkVD NyJ TZM JvwLCtI tQO AAycXF KJXuTp yjhhM IfZHvtM ldqvUfZ r DGxwb O aDszj zxnvvu SS vM YO TBqyY HnG N jEAB FyuWo lmgoYw tVkLG eJxVT X nK oUbN jvyD HTCD OAAQSk DmKeEu hl PZap twHOjD KAf wQy V RsXpqTn xn EQi NUAaPSX wcRI ztZbfo vKH KsXqJKs FoOlb a E nIv QTyb m zhj uawB jK kBhZ iMo SIdu xthCXZr thMjkK xnN UjwnSMV nYJeny ZOPOSO IjajgG KOIOcb jftGxtu nbZktF FxIc TDKKeee CyZKb qECWW h YvnNGrt TNswnZ AOKXb yzIqS xXK HCWs JYlw erwZunG GOsDPA HMVlLU rl RrXdZ Yd A Loy io n TPobqLY Rb GSkSM MB tKM jIdNC l CGrKpn AagE TGZV H m NLUdRE YwtJCh wfLZKNJ AUdKuY CkI zCRrAU U mD FPq CEodotz

Transparency is our policy. Learn how it impacts everything we do.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

How we make money

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your personal data

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

Verify your identity, personalize the content you receive, or create and administer your account.
Provide specific products and services to you, such as portfolio management or data aggregation.
Develop and improve features of our offerings.
Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

How we approach editorial content

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.