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Smart Beta vs. Active Alpha


Smart Beta vs. Active Alpha

Letter # 98

If you have total autonomy to decide asset and sector allocation (let’s call this Smart Beta) as well as security selection (i.e. Active Alpha), how much do you think the Beta vs. Alpha decisions are responsible for our portfolio returns in a particular cycle? Since most of us deal with individual issuers and stocks, Active Alpha dominates our mind share and we may believe that stock selection is responsible for a large proportion of our returns. In our today’s article in ET, we look at historical cycles to conclude that Smart Beta is given way too little credit than what it deserves. Read here:

Information in this letter is not intended to be, nor should it be construed as investment, tax or legal advice, or an offer to sell, or a solicitation of any offer to make investments with Buoyant Capital. Prospective investors should rely solely on the Disclosure Document filed with SEBI. Any description involving investment examples, statistical analysis or investment strategies is provided for illustration purposes only – and will not apply in all situations and may be changed at the discretion of the principal officer. Certain information has been provided and/or based on third-party sources and although believed to be reliable, has not been independently verified; the investment managers make no express warranty as to its completeness or accuracy, nor can it accept responsibility for errors appearing herein.