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Top Three Take-Aways From the Morningstar ETF Conference (Part 2)

Strategic beta is the new active

Ben Johnson 09.11.2017

In part 1 of this article, I talked through the first out of the three takeaways. In this article, I will talk through the remaining two takeaways.

Factors, Factors, Factors
The topic of factor investing, strategic beta, smart beta, or whatever you choose to call it is unavoidable these days. The theme was threaded throughout our conference agenda, as it is an area where inves­tors continue to have more questions than answers. We were fortunate to have a pair of the industry’s foremost experts on hand to share their thoughts: BlackRock’s Andrew Ang and Research Affiliates’ Chris Brightman.

Ang literally wrote the book on factor investing.1 In his presentation, he emphasized that factors are nothing new. The first widely recognized reference to value investing was made in Benjamin Graham and David L. Dodd’s “Security Analysis,” first published in 1934. The idea that buying cheap stocks is generally a winning strategy is decades old. The same can be said for momentum, which was effectively captured in Edwin Lefevre’s “Reminiscences of a Stock Operator,” published in 1923.

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About Author

Ben Johnson  Ben Johnson, CFA is the Director of Passive Fund Research with Morningstar.

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