Smart beta growth hits 29%, as demand for minimum variance takes hold

first_imgEuropean investors pumped more than €30bn into ‘smart beta’ investments in 2014, with research suggesting institutional investors accounted for almost two-thirds of the overall market.Figures from UK research firm Spence Johnson showed that the Continental European market topped €132bn by the end of last year, and predicted annualised growth of 21% over the next five years.It also said institutional investors would see their market dominance diminish over time, with the research suggesting retail investors would account for 42% of the €340bn market by 2019.Spence Johnson, supported by research by CAMRADATA, separated smart beta strategies into single factor, multi factor, minimum variance and parity strategies. There are three approaches to these strategies called ‘advanced beta’, advanced index’ and ‘alternative index’, with the component of active management diminishing through the list.The latest market growth is driven by single-factor mandates and allocations to minimum variance strategies, specifically into the more passive alternative index space of the smart beta market.The report said single-factor assets grew to €50bn from €39bn, mostly allocated to alternative index approaches.There is now €10bn in minimum variance strategies, an increase of 56% from 2013.“Our predictions,” Spence Johnson said, “suggest minimum variance strategies will be the fastest growing smart beta product type for both institutional and retail/wholesale investors.”Net inflows into the advanced beta approach fell over 2014, except for those into minimum variance strategies.Flows into alternative index approaches rose across all strategies, suggesting investor preference for the more passive, and inherently cheaper, products.However, Spence Johnson said that, while investors’ cost cutting was a major driver of growth in smart beta products, inflows into advanced beta (minimum variance) suggested it was not the primary focus.“This observation,” the report said, “is supported by survey evidence that lists factors such as return enhancement, risk diversification and even a desire to complement traditional active or passive allocations all ranked higher than cost as key drivers for both institutional and wholesale investors.”Spence Johnson also said the market remained equity focused, with slow innovation for products in other asset classes, particularly fixed income.eVestment, the institutional investment data provider, only lists nine unique ‘smart beta’ or ‘enhanced index’ strategies for fixed income, dwarfed by its own traditional market, and equity smart beta.Equity accounted for 79% of total smart beta assets, but the research firm said evidence of demand for fixed income products led it to expect strong growth of the market, estimated to be 35% per year until 2020.The research, separating Continental and UK investors, suggested UK allocations were more focused on single-factor index products – but there were also signs of a growing demand for low-volatility strategies.European investors use risk-weighted approaches more, with €26bn in minimum variance and €18bn in risk parity products.“Historically, UK investors have favoured simple single-factor strategies, with an estimated €26bn,” Spence Johnson said.“Evidence from UK consultants, however, suggests demand for low volatility approaches is growing among UK institutional investors concerned about the high levels at which current equity markets are trading.”To read more on pension funds’ smart beta strategies, see this month’s On The Recordlast_img read more

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Blind woman killed by lethal injection

first_imgDailyMail 8 October 2013Medics have killed a woman by lethal  injection because she could not cope with becoming blind.In one of the first cases of euthanasia for a  disability, the 70-year-old was deemed by doctors to be ‘suffering  unbearably’.They granted her wish to die after she had  previously tried to commit suicide several times.But pro-life campaigners said the case showed  how euthanasia and assisted suicide for more trivial reasons can soon become the  ‘norm’ in countries where it is legal.They insisted it was medical negligence for  the doctors in Holland to have gone along with the woman’s suicidal ideas and  said they should have found a way to manage her psychological  problems.The unnamed woman had been born with poor  eyesight which had deteriorated into blindness as she entered old age.http://www.dailymail.co.uk/news/article-2448611/Blind-Dutch-woman-euthanised-loss-sight.htmllast_img read more

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Jonny Evans holding talks with West Brom after fee agreed with Manchester United

first_img Press Association Sport understands the deal will cost the Baggies an initial £6million rising to £8million with add ons. Tony Pulis confirmed his interest in the Northern Ireland international on Friday as he looks to bolster his defence. He said: “Jonny would be a great signing for the football club but it’s down to the money men and his side, it takes three parties, the player and the clubs. I’d love to sign Jonny Evans.” United boss Louis Van Gaal had planned to play Evans in a behind closed doors friendly against Ajax on Thursday but pulled him out of the line up when it became clear they were close to agreeing a deal for the 27-year-old. Evans has made 196 appearances for United, scoring seven goals, since making his debut in 2007 after coming through the ranks at Old Trafford. His move to The Hawthorns is likely to trigger Joleon Lescott’s exit after a year with the Baggies with Aston Villa interested in the defender. Northern Ireland manager Michael O’Neill spoke earlier this week of his surprise at Evans’ lack of game-time for the Red Devils, feeling the six-match suspension incurred for spitting at Newcastle’s Papiss Cisse in early March was a key factor. “I am a bit surprised at how things have worked out for Jonny at United, because when I have seen him play under David Moyes and Louis van Gaal he has done well,” O’Neill, speaking on Wednesday at his latest squad announcement, told t he Belfast Telegraph. The 27-year-old Northern Ireland international will now hold talks with the Baggies ahead of ending his nine-year stay at Old Trafford. A move was made for Evans after Tottenham centre-back Federico Fazio failed to agree a contract to move to The Hawthorns following a day of talks last week. “Sometimes this situation happens when a new manager comes in because he is looking to bring in his own players. “In my view Jonny has been unfortunate with injuries and the suspension last season didn’t help him. I was at Newcastle that night and I thought he played really well and had the opportunity to get a run in the team. It didn’t happen because of a six-match suspension, which I think was unlucky. “For me, Jonny Evans is an excellent player who could play in a top-six team in the Premier League and do a good job for them. “Jonny has known he would be in this type of situation since the end of last season and it hasn’t changed since he went back to United in pre-season. “He has spent most of his career at Manchester United and at his age, 27, this is a very important move for him.” Press Association West Brom have agreed a fee with Manchester United for defender Jonny Evans, Press Association Sport understands.last_img read more

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