Low volatility continues to be the most popular smart beta strategies of institutional investors, according to FTSE Russell.
The company surveyed 253 asset owners in January and February. It polled the largest institutional investors in North America, Europe and Asia on their use of smart beta indexes.
Investors are turning to new indexes because the conventional market-capitalization index is seen as less reliable in a climate characterized by economic uncertainty and market volatility.
Read: Is smart beta the fourth line of investing?
FTSE Russell released new 2016 survey data on Thursday showing the most popular smart beta indexes are low volatility (46 per cent), value (41 per cent) and multi-factor combination (37 per cent) indexes. Less commonly used were fundamental (30 per cent), momentum (22 per cent) and high-quality indexes (22 per cent), according to FTSE Russell.
Low volatility smart beta strategies had declined slightly, from 49 per cent in the same survey in 2014.
Says Jackie O’Flanagan, head of Canada for FTSE Russell: “[W]hile many asset owners have increased their understanding and implementation of smart beta, continuing innovations in other asset classes and the multi-factor arena underscore the need for more information and education.”
This article originally appeared on the website of Benefits Canada‘s sister publication, advisor.ca.