
Darkest Quant Fears Ring True in $1T World of Smart Beta - chollida1
https://www.bloomberg.com/news/articles/2020-09-03/darkest-quant-fears-ring-true-in-1-trillion-world-of-smart-beta
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perl4ever
Hmm, if smart beta is a trend, and it's losing money, doesn't that mean it's
improving everyone else's returns?

Also, when the article says "The median fund has lost about 1.5% on a total
return basis, compared with a more than 10% gain for the Vanguard Total Stock
Market ETF."

It makes me think of stuff I've read about how a low return can be much more
valuable than it seems, if it is not correlated with the stock market. There
is some financial engineering magic where you can actually transmute the lack
of correlation into increased returns.

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PaulHoule
2020 would be painful for Smart Beta.

A few big stocks (e.g. AMZN, AAPL) represent a large faction of stock market
performance and have done well compared to the average stock in recent years
and particularly the last six months.

"Smart Beta" will almost certainly be underweighted those stocks, so they
would have 'gotten killed' compared to index funds.

