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Josh Brown: Five Things Smart Beta Can’t Do For You
FYI: The discussion around Smart Beta gets more ridiculous by the day. This morning I read a highly entertaining bit of nonsense about how smart beta can be used for downside protection. I spit McGriddle crumbs and syrup all over my suit, so my friends at ETF.com owe me a new one. Regards, Ted http://thereformedbroker.com/2016/02/05/five-things-smart-beta-cant-do-for-you-2/
"Ironically, the popularity of factor tilts (Smart Beta ETFs are now a half-trillion dollar category) may be the strategy’s biggest risk – the premiums for premiums are being compressed now that everyone is betting on the same attributes to outperform. It would be very funny to see factor tilts stop working for a few years, followed by an exodus to whatever new fad comes along, followed by factor tilt outperformance once again. To paraphrase Jesse Livermore, there is nothing new in Wall Street."
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