Scribd Logo
Upload

Welcome to Scribd!

  • 125 views

    Smart Beta: Presented By: Leon D'silva Rahul Choudhary

    Uploaded by

    Rahul Chaudhary
    This presentation discusses smart beta or factor-based investing. It begins with definitions of alpha and beta, then discusses active versus passive investing. Smart beta is described as building portfolios based on particular stock characteristics that are believed will outperform the market over time. Exchange traded funds are presented as a way to implement smart beta strategies. Common factors for smart beta investing include size, value, yield, momentum and volatility. Examples of stocks demonstrating size and low volatility factors during the 2008 financial crisis are provided. The presentation concludes with examples of unusual thematic ETFs focusing on millennials and obesity.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    Smart Beta: Presented By: Leon D'silva Rahul Choudhary

    Uploaded by

    Rahul Chaudhary
    125 views12 pages
    This presentation discusses smart beta or factor-based investing. It begins with definitions of alpha and beta, then discusses active versus passive investing. Smart beta is described as building portfolios based on particular stock characteristics that are believed will outperform the market over time. Exchange traded funds are presented as a way to implement smart beta strategies. Common factors for smart beta investing include size, value, yield, momentum and volatility. Examples of stocks demonstrating size and low volatility factors during the 2008 financial crisis are provided. The presentation concludes with examples of unusual thematic ETFs focusing on millennials and obesity.

    Original Description:

    Smart beta

    Original Title

    Smart Beta

    Copyright

    © © All Rights Reserved

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This presentation discusses smart beta or factor-based investing. It begins with definitions of alpha and beta, then discusses active versus passive investing. Smart beta is described as building portfolios based on particular stock characteristics that are believed will outperform the market over time. Exchange traded funds are presented as a way to implement smart beta strategies. Common factors for smart beta investing include size, value, yield, momentum and volatility. Examples of stocks demonstrating size and low volatility factors during the 2008 financial crisis are provided. The presentation concludes with examples of unusual thematic ETFs focusing on millennials and obesity.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    125 views12 pages

    Smart Beta: Presented By: Leon D'silva Rahul Choudhary

    Uploaded by

    Rahul Chaudhary
    This presentation discusses smart beta or factor-based investing. It begins with definitions of alpha and beta, then discusses active versus passive investing. Smart beta is described as building portfolios based on particular stock characteristics that are believed will outperform the market over time. Exchange traded funds are presented as a way to implement smart beta strategies. Common factors for smart beta investing include size, value, yield, momentum and volatility. Examples of stocks demonstrating size and low volatility factors during the 2008 financial crisis are provided. The presentation concludes with examples of unusual thematic ETFs focusing on millennials and obesity.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 12

    SMART

    BETA
    Presented by:
    Leon D’silva
    Rahul Choudhary
    AGENDA
    • Alpha & Beta

    • Active and Passive Investing

    • Smart Beta / Factor based Investing

    • Exchange Traded Fund (ETF)

    • Factors for Investing

    • Stock examples
    2
    • Strange ETFs
    ALPHA (α) and BETA (β)

    • Definition:
    • “Alpha can be defined as the difference between a portfolio’s
    risk-adjusted return and the return for an appropriate
    benchmark portfolio” (Fuller, 2000).
    • “Beta is the securities or portfolios price volatility relative to
    the overall market” (Aber, 1973).

    3
    Active and Passive Investing

    • Active Investing is the strategy in which investors constantly


    perform trade activities such as buying and selling of stocks
    (Chen, 2018).

    • Passive Investing is a strategy through which investors aim to


    maximize returns with minimal trades and thereby reducing
    transaction cost (Chen, 2018).

    4
    What is Smart Beta / Factor Investing?

    • "Smart beta is about building a portfolio of shares that


    have particular characteristics in the belief that, over
    time, investments with those attributes will deliver
    returns that beat the stock market as a whole” (Dimson.
    et al, 2017).

    5
    Exchange Traded Funds (ETF)

    6
    Factors for Investing

    • Size: Derived from market capitalization which is a function of share price.

    • Value: Takes into account book value and share prices.

    • Yield: A measure of value in terms of percentage dividend yield on a share.

    • Momentum: Takes past performance in terms of share price into


    consideration for predicting future likelihood.

    • Volatility: Analyses the behaviour of stocks (high / low volatile) in changing


    market conditions.
    7
    Source: Dimson, et.al ,(2017). In search of patterns (pp. 52-54). London: London Business
    School.
    Examples of low Volatility stocks prior,
    during and post 2008 financial crisis

    • Dollar Tree, Inc.

    Source: https://ca.finance.yahoo.com/quote/DLTR
    Examples of Large size stock prior,
    during and post 2008 financial crisis

    • Walmart, Inc.

    9
    Source: https://ca.finance.yahoo.com/quote/WMT
    STRANGE ETFs

    Global X Millennials The Obesity ETF


    Thematic ETF (MILN) (SLIM)

    10
    THANK
    YOU!
    REFERENCES

    • Aber, J. (1973). Beta coefficients and models of security return.


    Lexington: Lexington Books.
    • Chen, J. (2018). Active Investing. Retrieved from
    https://www.investopedia.com/terms/a/activeinvesting.asp
    • Chen, J. (2018). Passive Investing. Retrieved from
    https://www.investopedia.com/terms/p/passiveinvesting.asp
    • Dimson, E., Marsh, P., & Staunton, M. (2017). In search of patterns (pp.
    52-54). London: London Business School.
    • Fuller, R. (2000). Behavioral Finance and the Sources of Alpha. Journal
    Of Pension Plan Investing, 2(3), 4.
    12

    You might also like

    pFad - Phonifier reborn

    Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

    Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


    Alternative Proxies:

    Alternative Proxy

    pFad Proxy

    pFad v3 Proxy

    pFad v4 Proxy