3807179: After-Work Lecture: Smart Beta and the search for the Holy Grail

Description

The term “indexing” in equity markets is associated with the weighting of index constituents according to their absolute level of market capitalization. Accordingly, indices such as the SPI in Switzerland, S&P 500 in USA and MSCI World are enjoying a quasi-monopoly. However, in recent years, academics and market practitioners alike have increasingly called into question the superiority of this classical indexing approach. Stark criticism has been aimed at the theoretical underpinning and its implications for the index construction process.
New alternative indexing methods – often referred to as "Smart Beta" – centering on, for example, fundamentals, risk, or return expectations have emerged and are now challenging the once firmly established norm of traditional indexing. What does the landscape of Smart Beta look like, are these new indices really smart, and most importantly, what do these new indices have to offer investors? Is the new Holy Grail, that could potentially replace the traditional market capitalisation-weighted index as the standard index, to be found among the smart beta indices?


Speaker
Daniel Leveau is Chief Executive Officer of 1741 Asset Management Ltd. He joined the Asset Management division of Wegelin & Co. Private Bankers in 2001 where he was responsible for the development and implementation of quantitative equity strategies and the management of the Active Indexing® family of funds. He was named a Partner with limited liability of Wegelin & Co. in 2007. Before joining We-gelin & Co. he worked for a Swedish investment bank in the Arbitrage and Market Making team. Daniel Leveau holds a master's degree in finance from the University of Lund and is a Chartered Financial Analyst. A Swedish citizen, he speaks German, English and Scandinavian.