Strategic beta has a long way to go, admits Marc Zeitoun of Columbia Threadneedle Investments who heads up the strategic beta group that just released results of its new study on advisor awareness in the area.
“One of our biggest problems is people don’t understand what they are investing in,” Zeitoun told ThinkAdvisor on Thursday at the Morningstar Conference in Chicago. “What I would like people to react to is, who is managing the money?”
The quantitative online study of 299 advisors taken April 2-9, 2019, had some key findings, some that surprised Zeitoun.
First, 98% of the respondents said they had “some level of familiarity with strategic beta investing,” which surprised Zeitoun. “That means almost everyone knows about it,” he said. “But [we found] only 36% are confident in implementing it into their portfolios.”
A second finding that was “problematic” is that only 18% of advisors knew the portfolio managers on strategic beta funds, verses 27% who knew the names of portfolio managers on the active managed funds in which they are invested.
This means the conversation on strategic beta should be more about who is managing the fund and less about factors, he said.