European investors that already invest in smart beta will make greater allocations to the sector over the next few years as investment in these alternative indices becomes “widely accepted”.
Invesco Powershares, which produces smart beta funds, surveyed 400 investors and says 69% of existing users of the strategy expect to increase their allocations over the next three years.
Sixty per cent say smart beta strategies will become a widely accepted investment in the near term.
Wealth managers and financial advisers are increasingly turning to smart beta as an integral part of investor portfolios, with smart beta currently making up 9% of a user’s total portfolio.
Of those who had already adopted smart beta strategies, 91% say it meets expectations.
Bryon Lake, head of Invesco PowerShares for Europe, Middle East and Africa, says: “The results of this year’s research support our view on the continuing momentum behind factor-based indexing in Europe.”
The report found that many adopters of smart beta used traditional indexing investments as a stepping-stone to smart beta, with 63% of smart beta users having started with market cap-weighted indices.
Earlier this week it was announced that several UK pension funds were collaborating on passive investments, with a smart beta element.
©2015 funds europe
