This article was previously published by Ignites, a title owned by the FT Group.īoth smart beta, sometimes known as strategic beta, and thematic strategies group stocks that share similar characteristics. “Conceptually, themes and sectors and factors are all the same - they’re building blocks,” said Denise Chisholm, director of quantitative market strategy at Fidelity. Though the two product categories may go after the same portfolio goal, they do so in very different ways - and shops can use both to their advantage.
However, smart beta and thematic ETFs need not be at odds for attention among ETF shops and investors, executives said. Their buzz was once the purview of smart beta, which emphasises investment factors that have been shown to deliver outperformance such as momentum, growth or value, but those products have faded in prominence among many managers’ line-ups. Thematic strategies have become darlings of the ETF industry, with managers pumping out products that seek to combine outperforming stocks and a story that investors can easily understand. Visit our ETF Hub for investor news and education, market updates and analysis and easy-to-use tools to help you select the right ETFs.
