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How to get the best out of smart beta (factor-based) investing

13 September 2017

The challenge today is no longer about how to blend active and passive, but how to blend the underlying risk factors (or styles such as value, quality, dividend yield and momentum) to build more diversified, risk-smart portfolios. Factors are considered to be the fundamental building blocks of investment returns. Understanding the different risk factors in your portfolio will lead to better insights and more informed portfolio construction decisions, says Jason Swartz head of portfolio solutions at Satrix. As a result, what is now termed ‘factor investing’ is beginning to revolutionise the investment industry.

The right investment blend

11 September 2017

No one takes losses lightly; even an investor who has signed off on an aggressive investment mandate. In fact, no matter how small the specific investment item is in relation to a total portfolio, any significant decrease in value is met with horror. At the same time, excellent returns are never greeted with as much enthusiasm as one would expect. It seems that to many investors, all losses are too big, while all gains are too small.

Enter smart beta

11 September 2017

Smart beta portfolios range from fairly straightforward to quite complex. One of the simplest approaches holds securities in equal weights, rather than weighting them by market capitalisation (market cap).

Sequencing of returns risk

07 September 2017

One of the key risks retirees face is a significant loss in the value of their retirement capital. This is usually as a result of poor investment returns during times of increased market stress, which manifests in higher levels of volatility and may include significant market corrections. In many instances, this is exacerbated through too high drawdown rates. This is an important topic, but one for another day.

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Question

Do you think short-term insurance broking will survive the AI plus humanoid robotics age?

Answer

Human first always Not a chance Possibly maybe Yes, but reimagined

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